S67 similar to Question Help Lemon Lime Company made sales o

S6-7 (similar to) Question Help Lemon Lime Company made sales of S32,250 million during 2014. Cost of gcods sold for the year totaled $12,900ion. At the end of 2013, Lemon Lime\'s inventory stood at $1,400 million, and Lemon Lime ended 2014 with inventory of $1,600 million. Compute Lemon Lime\'s gross profit percentage and rate of inventory turnover for 2014 Begin by computing Lemon Limes gross profit percentage for 2014 (Round your answer to the nearest tenth of a percent, XX% ) Lemon Lime\'s gross profit percentage for 2014 is %.

Solution

Solution

Gross profit =sales-cost of good sold

=$32,250 million-$12,900 million

=$19,350 million

Gross profit percentage=(Gross profit/net sales)×100

=($19,350/$32,250)million ×100

=60%

Inventory turnover=cost of good sold/average inventory

Average inventory=(1400+1600)/2

=$1,500 million

Inventory turnover=($12,900/$1,500) million

=8.6 times