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Sanchez Company engaged in the following transactions during 2015:
1)Started the business by issuing $42,000 of common stock for cash.
2)The company paid cash to purchase $26,400 of inventory.
3)The company sold inventory that cost $16,000 for $30,600 cash.
4)Operating expenses incurred and paid during the year,$14,000.
Sanchez Company engaged in the following transactions during 2016:
1)The company paid cash to purchase $35,200 of inventory.
2)The company sold inventory that cost $32,800 for $57,000 cash.
3)Operating expenses incurred and paid during the year,$18,000.
Note: Sanchez uses the perpetual inventory system.
-Sanchez's gross margin for the year 2016 is:

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Use the following for questions 
Sanchez Company engaged in the following transactions during 2015:
1)Started the business by issuing $42,000 of common stock for cash.
2)The company paid cash to purchase $26,400 of inventory.
3)The company sold inventory that cost $16,000 for $30,600 cash.
4)Operating expenses incurred and paid during the year,$14,000.
Sanchez Company engaged in the following transactions during 2016:
1)The company paid cash to purchase $35,200 of inventory.
2)The company sold inventory that cost $32,800 for $57,000 cash.
3)Operating expenses incurred and paid during the year,$18,000.
Note: Sanchez uses the perpetual inventory system.
-Sanchez's gross margin for the year 2016 is:

Quizplus · Accepted Answer

Gross margin is calculated as sales revenue minus the cost of goods sold. For 2016, sales revenue is $57,000 and the cost of goods sold is $32,800. Therefore, the gross margin is $57,000 - $32,800 = $24,200.

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