Psang Inc. purchases all merchandise inventory on credit and uses a perpetual inventory system. The Accounts Payable account is used for recording merchandise inventory purchases only; all other current liabilities are accrued in separate accounts.
You are provided with the following selected information for the most recent three years
Instructions:
(a) Calculate the missing amounts for items [1] through [10].
(b) Calculate the gross profit margin and profit margin for each year.
(c) Net sales declined over the three-year period. Does this mean that profitability should also have declined over the same period? Refer to the gross profit margin and profit margin to explain and support your answer.
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