What Business Has the Highest Profit Margin? Why Should You Calculate Operating Margin? The Relationship Between Gross Profit Margin and Net Profit Margin How to Calculate Gross Margin for a Service-Based Company How to Calculate Gross Margin/Gross Profit Margin Higher gross margins mean more money left over to cover operating expenses.īoth gross profit and gross margin are key metrics business owners should continually review to remain profitable. In other words, it’s the percentage of the selling price left over to pay for overhead expenses. Gross profit margin is the percentage of your business’s revenue that exceeds production costs. (In simple terms: Revenue minus cost of goods sold.) But what is the gross profit margin? You may already be familiar with gross profit, or the amount of money a business has left over after paying all direct expenses related to manufacturing a product or providing a service. Send invoices, track time, manage payments, and more…from anywhere. Pay your employees and keep accurate books with Payroll software integrationsįreshBooks integrates with over 100 partners to help you simplify your workflows Set clear expectations with clients and organize your plans for each projectĬlient management made easy, with client info all in one place Organized and professional, helping you stand out and win new clients Track project status and collaborate with clients and team members Time-saving all-in-one bookkeeping that your business can count on Tax time and business health reports keep you informed and tax-time readyĪutomatically track your mileage and never miss a mileage deduction again Reports and tools to track money in and out, so you know where you standĮasily log expenses and receipts to ensure your books are always tax-time ready Quick and easy online, recurring, and invoice-free payment optionsĪutomated, to accurately track time and easily log billable hours (double decling: 200% in 5 years 40% each).Wow clients with professional invoices that take seconds to create Sep 30 Depreciation expense 3333 Accumulated dep – equipment (16/4x10/12) 3333 Cash 5. Allowance for doubtful account (eventually pay the amountowed) 10000 March 1 Less on disposal 4. Jul 31 Interest receiable 67 Interest revenue ( 10 x 8% x 1/12) 67 OCT 1 CASH 10200 Notes receiable 10000 Interest revenue (notes honored) (10000x8%x3/12) 200 Oct 1 Bad debt expense 10. Operating expenses The cost of the merchandise returned was $600.Oct 25 Sales return and Less: sales discount 20. 25 Issued a credit memo to TL for $1,000 for merchandise returned by him from the sale on October 20. The cost of the merchandise sold was $9,500. The company takes all discounts to which it is entitled 20 Sold merchandise for $16,000 to TL on account. 15 Paid for merchandise purchased on October 8. 10 Paid freight bill of $200 for merchandise purchased on October 8. 8 Purchased merchandise for $12,000 on account. 5 Paid $15,000 cash for operating expenses that were incurred and properly recorded in the previous period. Part 2 For each situation given below prepare journal entries on the October for BC Company B us perpetual inventory system. They are paid each Friday for a five-day workweek that begins cach Monday, June 30 is a Thursday in 2016. TL&MA Company has two office employees who earn $80 and 590 per day, respectively. It is estimated that the annual depreciation will be $8,400. On March 31, 2018, CLH Company purchased a delivery van for $42,000. A physical count of office supplies at June 30 revealed that there was $ still on hand. During June, office supplies costing 5600 were purchased. On June 1, 2018, the balance in the Office Supplies account was $100. The amount received was credited to the Unearned Rent account. On January 1, 2018, a tenant in an apartment building owned by CLH Company paid 55,400, which represents six months' rent in advance. Lance Company purchased a 3-year insurance policy on March 1, 2018, and debited Prepaid Insurance for $7. Aporopriate adjusting entries had been recorded in previous months. You are to prepare the necessary adjusting journal entries for CLH Company for the month of January for each situation given. Part 1: The following information for CLH Company is available on June 30, 2018, the end of a monthly accounting period.
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