Question

Suspendus Company has the following financial data for the year ended December 31, 2021: net sales $1,680,000, operating expenses $880,000, net income $104,000, stockholders’ equity $800,000, and assets $1,901,000. The information for the year ended December 31, 2020 was: net sales $1,450,000, operating expenses $760,000, net income $87,000, stockholders’ equity $700,000, and assets $1,601,000. Calculate the gross profit margin for the year ended December 31, 2021.

Answer 1

The gross profit margin for the year ended December 31, 2021 is 58,57%.

Step-by-step explanation:

As per given information:

2021

Net Sales = $1,680,000

Net Income = $104,000

Operating expenses = $880,000

Net Income = Gross Income - Operating Expenses

$104,000 = Gross Income - $880,000

Gross Income = $104,000 + $880,000

Gross Income = $984,000

Gross Profit Margin = ( Gross income / Net sales ) x 100

Gross Profit Margin = ( 984,000 / 1,680,000 ) x 100

Gross Profit Margin = 58.57%