The owner of a local souvenir shop in Garden City Beach is in the process of preparing an income statement at the end of the first year of operation. Because it is the first year of operation, there was no inventory at the beginning of the year. Given below is certain financial information for the period.
- Merchandise Inventory- year-end $25,000
- Purchases $120,000
- Freight -in $5,000
- Sales $225,000
- Property Taxes - Store $10,000
- Depreciation - Store $20,000
- Insurance - StaStore $8,000
- Salary - Sales ff $20,000
- Advertising $6,000
In an attempt to evaluate how well she is doing she would like to calculate her Gross Profit or Margin for the year. Sketching out an income statement may help you arrive at this value. What is the Gross Margin?