MacLean Corp. purchases all merchandise inventory on credit and uses a perpetual inventory system. The Accounts Payable account is used for recording merchandise inventory purchases only; all other current liabilities are accrued in separate accounts.

You are provided with the following selected information for the most recent three years:

Instructions
(a) Calculate the missing amounts for items [1] through [10]. You will find it helpful to prepare summary journal entries and T accounts for Merchandise Inventory and Accounts Payable to solve for items 3, 4, 7, and 8.
(b) Calculate the gross profit margin and profit margin for each year.
(c) Sales increased over the three-year period. Does this mean that profitability should also have increased in the same period? Refer to the gross profit margin and profit margin to explain and support your answer.

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2012 2011 2010 Income statement data Net sales Cost of goods sold Gross proft Operating expenses Income tax expense Profit $227,600 $219,500 133,500 145,400 84,300 8,000 356,500 80,100 47,000 6,000 [10) 7,000 30,000 Statement of financial position data $3 14,700 s 10,000 20,000 Accounts payable 25,000 Additional information Purchase of merchandise inventory on account Cash payments to suppliers $ [8] 160,000 $132,000 127,000 $141,000