Psang Inc. 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].
(b) Calculate the gross profit margin and profit margin for each year.
(c) Net sales declined over the three-year period. Does this mean that profitability should also have declined over 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 $96,900 69,300 Income statement data $86,000 5] 27,000 61,500 Net sales Cost of goods sold Gross profit Operating expenses Income tax expense Profit 25,500 35,100 6,350 43,500 6,120 6,450 S12 14500 10 Statement of financial position data Merchandise inventory Accounts payable 4 $14,700 4,600 $11,000 6,500 Additional information Purchase of merchandise inventory on account Cash payments to suppliers $24,000 22,000 $ [7] $25,900 25,000