26. If a company uses the perpetual inventory method, when would it normally discover that merchandise inventory has been lost or stolen? 27. What is a common size income statement?...

26. If a company uses the perpetual inventory method, when would it normally discover that merchandise inventory has been lost or stolen?

27. What is a common size income statement? Explain how a common size income statement is useful to financial statement users.

28. Explain the computation and the meaning of each of the following:

a. Gross margin percentage

b. Return on sales

29. Discuss the major differences between a perpetual inventory system and a periodic inventory system.

30. Indicate how accounting for lost and stolen merchandise differs between firms using a perpetual inventory system and those using a periodic inventory system. Which system provides the best way to account for such losses and why?