QUESTION 52 FANCY RETAIL STORE, INC. (FRS) INCOME STATEMENT For the Year Ended December 31, 20XX $500,000 Gross Sales Less: Sales Returns & Allowances $10,000 Sales Discounts 5,000 15,000 Net Sales Revenue $485,000 $100,000 Cost of Goods Sold Inventory, January 1, 20XX Purchases Less: Purchase Returns/Allow. Purchase Discounts Net Purchases Plus: Freight-In Goods Available for Sale Less: Inventory, Dec. 31, 20XX Cost of Goods Sold Gross Margin $200,000 1,000 500 198,500 2,500 201.000 301,000 75,000 226,000 259,000 perating Expenses Salaries Rent 25,000 25,000 25,000 25,000 1,000 1.000 Operating Expenses Salaries Rent Depreciation Supplies Total Operating Expenses Operating Income Other Revenue and (Expenses) Interest Revenue Income Before Tax 52.000 207,000 5,000 5.000 212,000 Taxes (30%) Net Income 63,600 $148.400 FINANCIAL RATIOS Gross margin ratio gross margin net sales Net Income ratio = net income net sales Operating expense ratio total operating expenses net sales Returns and Allowances ratio = returns and allowances net sales Inven of goods sold Question Completion Status: Operating expense ratio total operating expenses net sales Returns and Allowances ratio = returns and allowances net sales Inventory turnover rate= costs of goods sold Average inventory at cost ROI net income total investment Question: The Gross Margin Ratio for FRS, Inc. is a. 30.5996 b. 2.06% c. 55.64% d. 53.40% e. 10.72% QUESTION 53