Kingbird, Inc. reported net sales of $267,000, cost of goods sold of $160,200, operating expenses of $48,900, net income of $42,720, beginning total assets of $532,300, and ending total assets of $618,100. Calculate profit margin and gross profit rate. (Round answers to 1 decimal place, e.g. 10.2%.)

Answer and Explanation:

The computation is shown below:

Profit margin = Net income ÷ Net sales

= $42,720 ÷ $267,000

= 16%

Now the gross profit rate is  

But before that the gross profit is

Gross profit = Net sales - Cost of goods sold

= $267,000 - $160,200

= $106,800

Now Gross profit rate is

= Gross profit ÷  Net sales

= $106,800 ÷ $267,000

= 40%

Alex Vera organized Succulent Express at the beginning of February 20Y4. During February, Succulent Express entered into the following transactions:
a. Terry Mason invested $30,000 in Succulent Express in exchange for common stock.
b. Pald $5,400 on February i for an insurance premium on a one-year policy.
c. Purchased supplies on account, $1,800.
d. Received fees of $57,000 during February
e. Paid expenses as follows: wages, 521,600; rent, $6,400; utilities, $2,800; and miscellaneous, $3,200.
f. Paid dividends of $8,000.
Record the preceding transactions using the integrated financial statement framework. After each transaction, enter a balance for each item. If an amount box does not require an entry, leave it blank. Enter account decreases and net cash outflows as negative amounts using the minus sign.