Determine the gross profit percentage

Response to the following :

Refer to the information in problem 1:


Prepare all closing entries. Include general ledger account numbers as shown in the chapter - for example, Purchases: 550. Include brief descriptions for each entry

Problem 1:

The following information is taken from the records of O'Donnell Corp. at June 30, 2016, its fiscal year-end:

Advertizing expense                       $ 1,500

Commissions expense                      4,000

Delivery expense                             1,000

Insurance expense                           1,000

Opening inventory                            6,000

Purchases                                     35,000

Purchase returns and allowances         2,000

Rent expense                                  2,500

Salaries expense                              5,000

Sales (gross)                                      72,000

Sales returns and allowances              2,000

Transportation-in                             1,000

The merchandize inventory at June 30, 2016 amounted to $10,000.


1. Prepare a classified income statement. Assume all expenses not related to cost of goods sold are selling expenses.

2. Compute gross profit percentage.

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Financial Accounting: Determine the gross profit percentage
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