Calculate the gross profit ratio for the month of march

Reference no: EM131955894

Problem

Toys "R" Us sells a variety of children's toys, games, books, and accessories. Assume that a local store has the following amounts for the month of March 2018.

Sales revenue	$77,300	Inventory (Mar. 31, 2018)	$1,000
Advertising expense	6,400	Insurance expense	2,300
Rent expense	4,300	Sales discounts	3,000
Gain on sale of building	7,500	Salaries expense	9,400
Inventory (Mar. 1, 2018)	2,800	Income tax expense	4,200
Cost of goods sold	35,800

Required:

1. Prepare a multiple-step income statement for the month ended March 31, 2018.

2. Calculate the inventory turnover ratio for the month of March. Would you expect this ratio to be higher or lower in December 2018? Explain.

3. Calculate the gross profit ratio for the month of March.

Reference no: EM131955894

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