or decrease in gross profit margin. 3.5. Explain how a company could have a decreasing gross profit margin but an increasing operating profit margin. 3.6. What is an example of an industry that would need to spend a minimum amount on advertising to be competitive? On research and development? 3.7. Alpha Company purchased 30% of the voting common stock of Beta Company on January 1 and paid $500,000 for the investment. Beta Company reported $100,000 of earnings for the year and paid $40,000 in cash dividends. Calculate investment income and the balance sheet investment account for Alpha Company under the cost method and under the equity method