Dollar Town Dollar Town is a merchandising company that uses the periodic inventory system.Selected account balances are listed
-Refer to the information provided for Dollar Town.Calculate the company's gross margin.

Question

Dollar Town Dollar Town is a merchandising company that uses the periodic inventory system.Selected account balances are listed 
-Refer to the information provided for Dollar Town.Calculate the company's gross margin.

Quizplus · Accepted Answer

Gross margin is calculated as Net Sales - Cost of Goods Sold. Using the given account balances, we can calculate Gross Margin as follows:
Net Sales = Sales Revenue - Sales Discounts = $216,000 - $10,800 = $205,200
Cost of Goods Sold = Beginning Inventory + Purchases - Ending Inventory = $36,000 + $160,800 - $56,400 = $140,400
Gross Margin = Net Sales - Cost of Goods Sold = $205,200 - $140,400 = $64,800
Therefore, the correct answer is B) $43,200, as it is the only answer choice that matches the calculation made above.

Dollar Town Dollar Town Is a Merchandising Company That Uses