Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The adjusted trial balance of Club Canada Wholesale Inc. contained the following accounts at December 31, the company's year end: CLUB CANADA WHOLESALE INC. Adjusted
The adjusted trial balance of Club Canada Wholesale Inc. contained the following accounts at December 31, the company's year end: CLUB CANADA WHOLESALE INC. Adjusted Trial Balance December 31, 2018 Debit Credit Cash $12,000 Accounts receivable 17,800 Prepaid insurance 2,200 Inventory 104,600 Supplies 6,000 Land 129,800 Buildings 219,500 Accumulated depreciation-buildings $92,900 Equipment $95,500 Accumulated depreciation-equipment 32,300 Accounts payable 60,900 Unearned revenue 9,200 Income tax payable 3,400 Bank loan payable 97,600 Common shares 52,000 Retained earnings 149,600 Sales 1,093,300 Sales returns and allowances 23,700 Sales discounts 14,300 Cost of goods sold 807,700 Administrative expenses 88,100 Selling expenses 41,500 Interest expense 12,500 Interest expense 12.500 Interest revenue 2,600 Income tax expense 18,600 $1,593,800 $1,593,800 Calculate the profit margin and gross profit margin. (Round all amounts to 1 decimal place, e.g. 5.2.) Gross profit margin % Profit margin % The vice-president of marketing and director of human resources have proposed that the company change its compensation of the sales force to a commission basis rather than paying a fixed salary. Given the extra incentive, they expect net sales to increase by 15%. They estimate that gross profit will increase by $28,100, operating expenses by $14,800, and income tax expense by $2,500. Non-operating expense is not expected to change. Calculate the expected new gross profit and net income amounts. (Hint: You do not need to prepare a formal income statement.) (Round answers to the nearest whole dollar, e.g. 5,275.) Expected new gross profit $ Expected net income amount $ Calculate the revised gross profit margin and profit margin. (Round all amounts to 1 decimal place, e.g. 5.2.) Revised gross profit margin % Revised profit margin %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started