2. Prepare a retail operating statement from the following information and compute the markdown percentage:

Rent $ 9,000

Closing inventory at cost 28,000

Sales returns 6,500

Cash discounts allowed 2,000

Salaries 34,000

Markdowns 4,000

Other operating expenses 15,000

Opening inventory at cost 35,000

Gross sales 232,500

Advertising 5,500

Freight in 3,500

Gross margin as percentage of sales 35%

Note: The markdown percentage is not on the operating statement. It is simply the percentage of the resulting Net Sales that have been allowed to customers. Therefore, the following is applicable: Dollar Markdown = x% of Net Sales, which means the following: Markdown percentage = $ Markdown Net Sales

Obviously, one has to determine Net Sales from the information above to prepare the operating statement and to solve for markdown percentage.