-------------------------------july-------August-----Sept
Sales(unit) - - - - - - - -70000 - - 83000 - - - - - -
Production(Units)----73250 - -84750--91750
October expected sales = 97000
Ending Inventory for August
Production 84750
Less: Sales 83000
Add: Begin Inventory (83000*25%) - - 20750
Ending Inventory 22500
September:
Production in Units 91,750
Add: Beginning Inventory
Working note) 22,500
Less: Ending Inventory
( 97000X25%) (24,250)
Budgeted Sales Units 90,000
Answer:
Lopez Sales Company
1. The gross margin recorded by Lopez is as follows:
Sales total = $81,600
Deducting cost of sales = $38,400
Gross Margin = $43,200
2. The gain on the land sale recognized by Lopez amounts to:
Land details:
Selling price = $81,000
less cost = $43,200
Gain on sale = $37,800
Explanation:
a) The gross margin represents the difference between the selling price and the cost price of a good. It indicates profit prior to accounting for operational expenses to determine net income or margin.
It gauges whether the business can generate sufficient income to meet typical operating costs such as rent, utilities, and employee wages.
b) The gain from the sale of any capital asset is the difference between the selling price and the book value (cost). Such a gain is separately presented in the income statement and may be subject to capital gains tax.
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I hope this is helpful.
