Use the following income statements. LOCKEY FENCING CORPORATION Income Statement
ID: 2348318 • Letter: U
Question
Use the following income statements.
LOCKEY FENCING CORPORATION
Income Statements
For the Years Ended December 31
2010 2009
Net sales $ 100,000 $ 75,000
Cost of goods sold 58,000 45,000
Gross profit 42,000 30,000
Selling, general, and administrative expenses 9,000 4,500
Income from operations 33,000 25,500
Interest expense 3,000 3,750
Income before income tax 30,000 21,750
Income tax expense 9,000 6,525
Net income $ 21,000 $ 15,225
(a)
Calculate Net profit margin and Gross profit percentage. (Round your net profit margin answers to 1 decimal place. Omit the "%" sign in your response.)
2010 2009
Net profit margin % %
Gross profit percentage % %
Explanation / Answer
2010 Net profit margin = net profit/sales = 21000/100000 = 21.0% Gross profit margin = gross profit/sales = 42000/100000 = 42.0% 2009 Net profit margin = net profit/sales = 15225/75000 = 20.3% Gross profit margin = gross profit/sales = 30000/75000 = 40.0% Hope this helps!