The consolidated balance sheets of Gap Inc. included merchandise inventory in the amount of $1,625 as of January 30, 2016 (the end of fiscal year 2015) and $1,605 as of January 31, 2015 (the end of fiscal year 2014). Net sales were $14,529 and $14,663 at the end of fiscal years 2015 and 2014, respectively. Cost of goods sold and occupancy expenses were $9,273 and $8,790 at the end of fiscal years 2015 and 2014, respectively. All amounts are from Gap Inc.’s 2015 Form 10-K. How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank or enter "0". If the effect is negative, use the minus sign. Enter amounts in millions of dollars. For example, 12,400,000,000 would be entered as 12,400. Balance Sheet   Income Statement                             Stockholders'   Net     Assets = Liabilities + Equity   Revenues – Expenses = Income Cash                        3.  Gap Inc. sets forth net sales but not gross sales on its income statement. What type(s) of deduction(s) would be made from gross sales to arrive at the amount of net sales reported?     4.  Reconstruct the Cost of Goods Sold section of Gap Inc.'s 2015 income statement. Enter amounts in millions of dollars. For example, 12,400,000,000 would be entered as 12,400. Gap Inc. Cost of Goods Sold For the Year 2015 Merchandise inventory, 1/31/15    Cost of goods purchased                  5.  Calculate the gross profit ratios for Gap Inc. for 2015 and 2014. If required, round the percentage to one decimal place. Gap's 2015 gross profit ratio:   Gap's 2014 gross profit ratio:

The consolidated balance sheets of Gap Inc. included merchandise inventory in the amount of $1,625 as of January 30, 2016 (the end of fiscal year 2015) and $1,605 as of January 31, 2015 (the end of fiscal year 2014). Net sales were $14,529 and $14,663 at the end of fiscal years 2015 and 2014, respectively. Cost of goods sold and occupancy expenses were $9,273 and $8,790 at the end of fiscal years 2015 and 2014, respectively. All amounts are from Gap Inc.’s 2015 Form 10-K.

1. How does this entry affect the accounting equation?
   If a financial statement item is not affected, select "No Entry" and leave the amount box blank or enter "0". If the effect is negative, use the minus sign.
   Enter amounts in millions of dollars. For example, 12,400,000,000 would be entered as 12,400.

   Balance Sheet		Income Statement
   						Stockholders'		Net
   Assets	=	Liabilities	+	Equity		Revenues	–	Expenses	=	Income
   Cash

    

   3.  Gap Inc. sets forth net sales but not gross sales on its income statement. What type(s) of deduction(s) would be made from gross sales to arrive at the amount of net sales reported?
    

    

   4.  Reconstruct the Cost of Goods Sold section of Gap Inc.'s 2015 income statement. Enter amounts in millions of dollars. For example, 12,400,000,000 would be entered as 12,400.

   Gap Inc.
   Cost of Goods Sold
   For the Year 2015
   Merchandise inventory, 1/31/15
   Cost of goods purchased

    

   5.  Calculate the gross profit ratios for Gap Inc. for 2015 and 2014. If required, round the percentage to one decimal place.

   Gap's 2015 gross profit ratio:
   Gap's 2014 gross profit ratio: