Question

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Exercise 5-09 a-b Presented below is information for Furlow Company for the month of March 2020. Cost of goods sold $212,000 Rent expense $32,000 Freight-out 7,000 Sales discounts 8,000 Insurance expense 6,000 Sales returns and allowances 13,000 Salaries and wages expense 58,000 Sales revenue 380,000 Prepare a multiple-step income statement. (If there is a net loss then enter the amount using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Furlow Company Income Statement

Answer 1

FURLOW COMPANY
Income Statement
For the month ended March 2020
Particulars	Amount ($)	Amount ($)
SALES REVENUE
Sales Revenues		3,80,000
Less: Sales return and allowances	13,000
Less: Sales Discounts	8,000	21,000
Net Sales		3,59,000
Less: Cost of goods sold		2,12,000
Gross Profit		1,47,000
Less: Operating Expenses
Rent Expenses	32,000
Insurance Expenses	6,000
Freight out	7,000
Salaries & wage expenses	58,000
Total Operating expenses		1,03,000
Net Income		44,000

Gross Profit rate

Gross Profit rate = [Gross profit / Net Sales] x 100

= [$147,000 / $359,000] x 100

= 40.95%