Chapter 5, Problem 3AA

To determine

Concept Introduction:

Gross Margin:

The gross margin can be defined as the difference between net sale and cost of goods sold. It is calculated by subtracting cost of sales from net sales.

  $\text{Gross Margin = Net Sales – Cost of Sales}$

Gross Margin Ratio:

The gross margin ratio can be defined as the ratio calculated by dividing gross margin with sales. It is calculated as under −

  $\text{Gross margin percentage = }\frac{\text{Gross Margin}}{\text{ Sales}}\text{ X 100}$

To compute:

Gross margin ratio for Apple and Google and Samsung

To determine

Concept Introduction:

Gross Margin:

The gross margin can be defined as the difference between net sale and cost of goods sold. It is calculated by subtracting cost of sales from net sales.

  $GrossMargin=NetSales–CostofSales$

Gross Margin Ratio:

The gross margin ratio can be defined as the ratio calculated by dividing gross margin with sales. It is calculated as under −

  $Grossmarginpercentage=\frac{GrossMargin}{Sales}X100$

If Samsung's gross margin ratio is better than (a) Apple's ratio? (b) Google's

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

Whether (a) Apple, (b) Google and (c) Samsung use single-step or multi-step income statement