Question

Exercise 5-07 (Part Level Submission) Presented below is information for Crane Co. for the month of January 2022. Cost of goods sold Freight-out Insurance expense Salaries and wages expense $217,400 Rent expense 7,500 Sales discounts 13,800 Sales returns and allowances 61,400 Sales revenue 4,100 Other comprehensive income (net of $400 tax) $34,200 9,200 17,700 390,000 Income tax expense 2,000 2.000

Answer 1

CRANE COMPANY

Calculation of Profit Margin:
a. Net Income	$24,700
b. Net Sales revenue	$3,63,100
Profit Margin rate (a / b)	6.8%
Calculation of gross Profit rate:
a. Gross Profit	$1,45,700
b. Net Sales revenue	$3,63,100
Profit Margin rate (a / b)	40.1%

Workings

CRANE COMPANY
Income Statement
Sales
Sales Revenue		$3,90,000
Less:
Sales discount	$9,200
Sales returns and allowances	$17,700
		$26,900
Net Sales revenue		$3,63,100
Less: Cost of goods sold		$2,17,400
Gross profit		$1,45,700
Operating Expenses:
Insurance expenses	$13,800
Salaries and Wages expenses	$61,400
Rent expense	$34,200
Fright expense	$7,500
Total operating expenses		$1,16,900
Income Before Income taxes		$28,800
Less: Income tax Expense		$4,100
Net Income / (Loss)		$24,700

Comprehensive Income Statement
Net Income / (Loss)	$24,700
Other Comprehensive Income / (loss)	$2,000
Comprehensive Income / (Loss)	$26,700