Question - The owner of a local souvenir shop in Murrells Inlet is in the process of preparing an income statement at the end of the first year of operation. Because it is the first year of operation, there was no inventory at the beginning of the year. Given the following information:
Merchandise Inventory - end of year $20,000
Purchases $100,000
Freight - in $4,000
Sales $200,000
Property Taxes - Store $8,000
Depreciation - Store $25,000
Insurance - Store $7,000
Salary - Sales Staff $20,000
Advertising $5,000
What is the gross margin?