Question

E5-9 Presented below is information for Bach Company for the month of March 2014. Cost of goods sold £212,000 Rent expense £ 32,000 Freight-out 9,000 Sales discounts 6,600 Insurance expense 6,000 Sales returns and allowances 13,000 Salaries and wages expense 58,000 Sales revenue 380,000 Instructions (a) Prepare an income statement. (b) Compute the gross profit rate.

I want the solutions please asap.

Answer 1

Income Statement
Sales revenue	380,000
Sales discounts	-6,600
Sales returns and allowances	-13,000
Net Sales		360,400
Cost of goods sold		-212,000
Gross Profit		148,400
Operating Expenses:
Freight Out	-9,000
Insurance expense	-6,000
Salaries and wages expense	-58,000
Rent expense	-32,000
Total Operating Expenses		-105,000
Operating Income		$43,400

(b) Gross profit ratio = Gross profit/Net sales

= 148,400/360,400

= 41.17%

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