VIPSolutionsGiven the following information for the year ended 12/31/2020: Balances (DR/CR) Amount (250,000) Sales Revenue Selling and Administrative Expense 50,000 Sales Discounts 8,000 Sales Returns and Allowances 12,000 Cost of Goods Sold 140,000 Interest Expense 5,000 Determine the 2020 gross margin.
Question:
Given the following information for the year ended 12/31/2020: Balances (DR/CR) Amount (250,000) Sales Revenue Selling and Administrative Expense 50,000 Sales Discounts 8,000 Sales Returns and Allowances 12,000 Cost of Goods Sold 140,000 Interest Expense 5,000 Determine the 2020 gross margin.
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Asked by: Test User 100083
Created at: 2025-05-02 07:54:41
Asked by: Test User 100083
Created at: 2025-05-02 07:54:41
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To determine the gross margin for 2020, we need to first calculate the **Net Sales** and **Cost of Goods Sold (COGS)**, then subtract COGS from Net Sales.
**Given Data:**
- **Sales Revenue:** \$250,000
- **Sales Discounts:** \$8,000
- **Sales Returns and Allowances:** \$12,000
- **Cost of Goods Sold (COGS):** \$140,000
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### Step 1: Calculate Net Sales
Net Sales = Sales Revenue - Sales Discounts - Sales Returns and Allowances
Net Sales = \$250,000 - \$8,000 - \$12,000 = **\$230,000**
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### Step 2: Calculate Gross Margin
Gross Margin = Net Sales - COGS
Gross Margin = \$230,000 - \$140,000 = **\$90,000**
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### **Answer:**
**The 2020 gross margin is \$90,000.**
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