EatAway Enterprises sells food at the Calgary International Airport. Please refer below to some of their...

 

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EatAway Enterprises sells food at the Calgary International Airport. Please refer below to some of their Profitability ratios for the 2020 and 2019 financial years. 2020 2019 EatAway Enterprises' Ratios Gross Profit Margin Profit Margin 13.5% 22.5% 1.5% 2.6% Industry Ratio Averages Gross Profit Margin 10.6% 21.4% Profit Margin TINT 1.1% 2.3% Required: Analyze and explain the Gross Profit Margin and Profit Margin ratios for EatAway and provide some possible reasons for the changes. (4 marks) 012 PROBLEM 4-4 (LO2) Challenge Queseon - Closing Entries and Financial Statements Below is the unadjusted trial balance with accounts in alphabeOcal order for JenneZe Ltd. All accounts have normal balances. Jenneze Ltd. Unadjusted Trial Balance At September 30, 2016 Accounts payable Accounts receivable Accrued salaries payable $ 39,983 321,468 21,909 9,632 Accumulated depreciaeon, building Accumulated depreciaeon, vehicle 12,191 312,610 262,773 602 Adveresing expense Building Cash 15,050 21,500 Cash dividends Copyright Depreciaeon expense Income tax expense Income taxes payable Insurance expense Interest expense Interest payable Mortgage payable, due 2019 Office supplies Prepaid insurance expense Rent expense 7,164 13,545 13,545 11,137 452 4,730 90,300 5,418 8,498 67,725 Repairs expense Retained earnings 23,478 737,575 290,250 Revenue Salaries expense Share capital Shop supplies expense Unearned revenue Ueliees expense 155,517 4,515 2,259 112,875 39,981 Vehicle 45,150 Addieonal informaeon: Adjustments not yet recorded are: 1. Revenue earned but not yet billed is $20,000. 2. Depreciaeon expense for the vehicle is $3,000. 3. The building's esemated residual value is $100,000 and its esemated useful life is 25 years. 4. Salaries not yet paid are $2,500. 178 The Classified Balance Sheet and Related Disclosures 5. Revenue that was paid in cash as an advance of $50,000 is now earned. 6. Rent for October 2016 of $5,150 was paid and recorded to rent expense. 7. One-half of the prepaid jinsurance is has now been used. Mortgage payments for the next fiscal year will total $36,000, which includes interest expense of $6,000. EatAway Enterprises sells food at the Calgary International Airport. Please refer below to some of their Profitability ratios for the 2020 and 2019 financial years. 2020 2019 EatAway Enterprises' Ratios Gross Profit Margin Profit Margin 13.5% 22.5% 1.5% 2.6% Industry Ratio Averages Gross Profit Margin 10.6% 21.4% Profit Margin TINT 1.1% 2.3% Required: Analyze and explain the Gross Profit Margin and Profit Margin ratios for EatAway and provide some possible reasons for the changes. (4 marks) 012 PROBLEM 4-4 (LO2) Challenge Queseon - Closing Entries and Financial Statements Below is the unadjusted trial balance with accounts in alphabeOcal order for JenneZe Ltd. All accounts have normal balances. Jenneze Ltd. Unadjusted Trial Balance At September 30, 2016 Accounts payable Accounts receivable Accrued salaries payable $ 39,983 321,468 21,909 9,632 Accumulated depreciaeon, building Accumulated depreciaeon, vehicle 12,191 312,610 262,773 602 Adveresing expense Building Cash 15,050 21,500 Cash dividends Copyright Depreciaeon expense Income tax expense Income taxes payable Insurance expense Interest expense Interest payable Mortgage payable, due 2019 Office supplies Prepaid insurance expense Rent expense 7,164 13,545 13,545 11,137 452 4,730 90,300 5,418 8,498 67,725 Repairs expense Retained earnings 23,478 737,575 290,250 Revenue Salaries expense Share capital Shop supplies expense Unearned revenue Ueliees expense 155,517 4,515 2,259 112,875 39,981 Vehicle 45,150 Addieonal informaeon: Adjustments not yet recorded are: 1. Revenue earned but not yet billed is $20,000. 2. Depreciaeon expense for the vehicle is $3,000. 3. The building's esemated residual value is $100,000 and its esemated useful life is 25 years. 4. Salaries not yet paid are $2,500. 178 The Classified Balance Sheet and Related Disclosures 5. Revenue that was paid in cash as an advance of $50,000 is now earned. 6. Rent for October 2016 of $5,150 was paid and recorded to rent expense. 7. One-half of the prepaid jinsurance is has now been used. Mortgage payments for the next fiscal year will total $36,000, which includes interest expense of $6,000.

Answer rating: 100% (QA)

1 Gross Profit Margin Gross Profit indicates profit earned by the company from the sales less cost o... View the full answer