Your comparison of the gross margin percent for James Drugs for the years 2013 through 2016 indicatos a significant decine. Thislis shown by the following information (Click the icon to view the information) The following additional information is obtained from independent sources and the client's records as a means of investigating the controller's explanations (Click the icon to view the additional information) Requirements a. Evaluate the explanation provided by Amrock. Show calculations to support your conclusions b. Which specific aspects of the client's financial statements require intensive investigation in this audit? Requirement a. Evaluate the explanation provided by Amrock Show calculations to support your conclusion First, compute the gross margin percentage for drug sales for 2016 through 2013, then, compute the gross margin percentage for andrugsetor 2016 through 2013 (Round your answers to the nearest tenth percent. XX.X%. Drugs 2016 2015 Inc 0/1 % 2014 2013 94 or i Data Table - O 2016 2015 2014 2013 $ ne ar er Sales (thousands) 14,325 $ 12,975 11,375 $ 10,400 CGS (thousands) 8,824 7,876 6,870 6,261 Gross margin $ 5,501 5,099 $ 4,505 $ 4,139 Percent 38.4 39.3 39.6 39.8 A discussion with Madeline Amrock, the controller, brings to light two possible explanations. She informs you that the industry gross profit percent in the retail drug industry declined fairly steadily for three years, which accounts for part of the decline. A second factor was the declining percent of the total volume resulting from the pharmacy part of the business. The pharmacy sales represent the most profitable portion of the business, yet the competition from discount drugstores prevents it from expanding as fast as the nondrug items such as magazines, candy, and many other items sold. Amrock feels strongly that these two factors are the cause of the decline. Print Done dit filin enda More Info Industry Gross Profit Percent for Retailers of Drugs and Related Products 35.8 Drug Sales 2016 James Drugs ($ in thousands) Drug Cost of Nondrug Cost Nondrug Sales Goods Sold of Goods Sold 8,674 3,311 5 5.768 7.461 3.126 4,962 8.222 2.927 4,150 5,408 2,820 3,618 5,651 2015 2014 360 5,514 5,153 4,992 2013 36.1 36:3