(Learning Objective 3: Evaluating a company’s profi tability) T Mart, Inc., declared bankruptcy. Let’s see why. T Mart reported these fi gures:

❙ Requirement 1. Evaluate the trend of T Mart’s results of operations during 20X4 through 20X6. Consider the trends of sales, gross profi t, and net income. Track the gross profi t percentage (to three decimal places) and the rate of inventory turnover (to one decimal place) in each year. Also discuss the role that selling expenses must have played in T Mart’s diffi culties.
Quiz Test your understanding of accounting for inventory by answering the following questions. Select the best choice from among the possible answers given.