Answer:
                       Windsor, Inc.     Sheridan Company
Sales revenue              $82,000          $96,200
Sales returns and allowances  $6000           $4,200
Net sales                   $76,000          $92,000
Cost of goods sold           $52,440          $58,880
Gross profit                 $23,560          $33,120
Operating expenses         $13,680          $20,240
Net income                 $9,880           $12,880
Profit Margin                  13%              14%
Gross Profit Rate              31%              36%
Explanation:
As we Know:
Windsor, Inc.
Net Income = Gross profit - Operating Expenses = $23,560 - $13,680 = $9,880
Profit Margin = Â ( Net Profit / Net Sales ) x 100 = ( $9,880 / $76,000 ) x 100 = 13%
Gross Profit rate = Â ( Gross profit / Net Sales ) x 100 = ( $23,560 / $76,000 ) x 100 = 31%
Sheridan Company
Net Sales = Gross Sales - Sales returns and allowances
$92000 = Gross Sales - $4,200
Gross Sales = $92,000 + $4,200 = $96,200
Gross profit = Net sales - Cost of Goods Sold
$33,120 = $92,000 - COGS
COGS = $92,000 - $33,120
COGS = $58,880
Net income = Gross profit - Operating Expenses
$12,880 = 33,120 - Operating Expenses
Operating Expenses = $12,880 - $33,120 = $20,240
Profit Margin = Â ( Net Profit / Net Sales ) x 100 = ( $12,880 / $92,000 ) x 100 = 14%
Gross Profit rate = Â ( Gross profit / Net Sales ) x 100 = ( $33,120 / $92,000 ) x 100 = 36%
