ACCTG 1A-PC Connection is a leading mail order retailers of personal computers.

PC Connection is a leading mail order retailers of personal computers. A recent financial report issued by the company revealed the following information:

Merchandise inventory (beginning of year) $77 million

Merchandise inventory (end of year) $70million

Net Sales for the year $2.15 billion

Gross profit margin 13%

  • A. Compute the company’s cost of goods sold for the year
  • B. Approximately how much inventory did PC Connection purchase during the year?
  • C. What factors might contribute to the company’s low gross profit margin?
  • D. Discuss reasons why PC Connection uses a perpetual inventory system.