(1)Miracle Corporation had gross sales revenue of €1,700,000; cost of goods sold of €950,000; sales returns of €52,500; and sales discounts of €30,000 Compute for the year: (a) What is the net sales? (b) What is the gross profit? (c) What is the gross profit rate?

Accounting Jan 22, 2021

Expert Solution

(a)

Net sales=Sales revenue-Sales returns-Sales discount

=1,700,000-52,500-30,000

=1,617,500

(b)

Gross profit=Net sales-Cost of goods sold

=1,617,500-950,000

=667,500

(c)

Gross profit rate=(Gross profits/ Net sales)x100

=(667,500/1,617,500)x100

=41.26%

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