Problem - Cordell Distributing Company completed these merchandising transactions in the month of April. At the beginning of April, the ledger of Cordell showed Cash of $9,000 and Common Stock of $9,000.
Apr. 2 Purchased merchandise on account from Lang Supply Co. $8,300, terms 2/10, n/30.
Apr. 4 Sold merchandise on account $6,000, terms 2/10, n/30. The cost of the merchandise sold was $3,700.
Apr. 5 Paid $200 freight on April 4 sale.
Apr. 6 Received credit from Lang Supply Co. for merchandise returned $300.
Apr. 11 Paid Lang Supply Co. in full, less discount.
Apr. 13 Received collections in full, less discounts, from customers billed on April 4.
Apr. 14 Purchased merchandise for cash $4,700.
Apr. 16 Received refund from supplier for returned merchandise on cash purchase of April 14, $500.
Apr. 18 Purchased merchandise from Great Plains Distributors $5,500, terms 2/10, n/30.
Apr. 20 Paid freight on April 18 purchase $100.
Apr. 23 Sold merchandise for cash $8,300. The cost of the merchandise sold was $5,820.
Apr. 26 Purchased merchandise for cash $2,300.
Apr. 27 Paid Great Plains Distributors in full, less discount.
Apr. 29 Made refunds to cash customers for returned merchandise $180. The returned merchandise had a cost of $120.
Apr. 30 Sold merchandise on account $3,980, terms n/30. The cost of the merchandise sold was $2,500.
Required - Calculate the profit margin ratio and the gross profit rate. (Assume operating expenses were $2,050).