Exercise 5-25 Calculating expenses and cost of goods sold-periodic LO7 CHECK FIG
ID: 2405537 • Letter: E
Question
Exercise 5-25 Calculating expenses and cost of goods sold-periodic LO7 CHECK FIGURE: c. $16,900 Friar Company discloses the following information for the year ended October 31, 2017: Sales.. $355,000 5.500 Sales returns. 14,000 Merchandise inventory (beginning of period)... 31,000 Invoice cost of merchandise purchases....178,000 .3,600 6,000 11,000 142,000 65,000 Sales discounts. Purchase discounts.... Cost of transportation-in Gross profit from sale Profit.... Required Calculate (a) total operating expenses, (b) cost of goods sold, (c) merchandise inventory (end of period), and (d) gross profit ratio (round to two decimal places). Analysis Component Assuming that the gross profit ratio for the year ended October 31, 2016, was 47% compare Friar Company's performance from 2016 to 2017.Explanation / Answer
1.
d. Gross profit ratio = 142000/335500 = 42.32%
Analysis
There is a decrease of 4.68 % gross profit while comparing with previous years details
Gross profit from sales 142000 Less: Operating expenses Profit 65000 Therefore total operating expenses (142000-65000) 77000