Question
Winters Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Winters' ledger showed Cash of $8,800and Common
Winters Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Winters' ledger showed Cash of $8,800and Common Stock of $8,800.
May 1Purchased merchandise on account from Black Wholesale Supply for $7,900, terms 1/10, n/30.2Sold merchandise on account for $4,000, terms 2/10, n/30. The cost of the merchandise sold was $3,000.5Received credit from Black Wholesale Supply for merchandise returned $300.9Received collections in full, less discounts, from customers billed on May 2.10Paid Black Wholesale Supply in full, less discount.11Purchased supplies for cash $990.12Purchased merchandise for cash $3,410.15Received $253 refund for return of poor-quality merchandise from supplier on cash purchase.17Purchased merchandise from Wilhelm Distributors for $3,300, terms 2/10, n/30.19Paid freight on May 17 purchase $275.24Sold merchandise for cash $6,050. The cost of the merchandise sold was $4,510.25Purchased merchandise from Clasps Inc. for $880, terms 3/10, n/30.27Paid Wilhelm Distributors in full, less discount.29Made refunds to cash customers for returned merchandise $145. The returned merchandise had cost $98.31Sold merchandise on account for $1,408, terms n/30. The cost of the merchandise sold was $913.
Calculate the profit margin and the gross profit rate. (Assume operating expenses were $1,540.)(Round answers to 1 decimal place, e.g. 15.5%.)
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