Question

The adjusted trial balance of Wildhorse Company included the following selected accounts:

		Debit		Credit
Sales Revenue				$645,000
Sales Returns and Allowances		$50,000
Sales Discounts		9,100
Cost of Goods Sold		396,000
Freight-Out		2,200
Advertising Expense		15,100
Interest Expense		22,500
Salaries and Wages Expense		81,000
Utilities Expense		23,000
Depreciation Expense		3,900
Interest Revenue				25,100

Use the above information to prepare a multiple-step income statement for the year ended December 31, 2022. (List other revenues before other expenses.)

WILDHORSE COMPANY Income Statement
select a closing name for section one
enter an income statement item				$enter a dollar amount
select between addition and deduction                                                                      AddLess:
enter an income statement item		$enter a dollar amount
enter an income statement item		enter a dollar amount
				enter a subtotal of the two previous amounts
select a closing name for section one				enter a total amount for section one
enter an income statement item				enter a dollar amount
select a summarizing line for the first part				enter a total amount for the first part
select an opening name for section two
enter an income statement item		$enter a dollar amount
enter an income statement item		enter a dollar amount
enter an income statement item		enter a dollar amount
enter an income statement item		enter a dollar amount
enter an income statement item		enter a dollar amount
select a closing name for section two				enter a total amount for section two
select a summarizing line for the second part				enter a total amount for the second part
select an opening name for section three
enter an income statement item				enter a dollar amount
select an opening name for section four
enter an income statement item				enter a dollar amount
select a closing name for this statement				$enter a total net income or loss amount

Calculate the profit margin and gross profit rate. (Round answers to 1 decimal places, e.g. 15.2%.)

Profit margin		enter percentages rounded to 1 decimal place	%
Gross profit rate		enter percentages rounded to 1 decimal place	%

Answer 1

Wildhorse Company
Income Statement
For the year ended December 31, 2022
Net Sales Revenue
Sales Revenue		645,000
Less:
Sales Returns and Allowances	50,000
Sales Discounts	9,100
		59,100
Net Sales Revenue		585,900
Cost of Goods Sold		396,000
Gross Profit		189,900
Operating expenses
Freight-Out	2,200
Advertising Expense	15,100
Salaries and Wages Expense	81,000
Utilities Expense	23,000
Depreciation Expense	3,900
Total Operating expenses		125,200
Operating Income		64,700
Non-operating income
Interest revenue		25,100
Non-operating expense
Interest expense		(22,500)
Net Income		67,300
Ratios
Profit margin		11.5%	=67,300 / 585,900
Gross profit rate		32.4%	=189,900 / 585,900
Formulas
Profit margin	Net Income / Net Sales Revenue
Gross profit rate	Gross Profit / Net Sales Revenue