Question 27:

A company sells inventory for $50,000 cash with a cost of goods sold of $35,000.

Requirements:

1. Record the journal entry to recognize the sale of inventory.

2. Post the journal entry to the Sales Revenue and Cost of Goods Sold accounts in the ledger.

3. Calculate the gross profit margin for this sale.

4. Analyze how this transaction affects the company's income statement.

5. Discuss strategies for improving gross profit margin.