peresented below is information for batch compney for the month of march 2014.
Cost of goods sold
frieght out
ensurance expense $212,000 rent expense 9,000 sales
Discounts 6,600
6,000 sales returns and allowance
55,000 sales revenue 38,000
Salaries and wages
instructions
A prepare an income statement
B compute the gross propit rate
A) Income Statement for Batch Company - March 2014:
Sales Revenue: $55,000
Less: Sales Discounts: ($6,600)
Less: Sales Returns and Allowance: ($6,000)
Net Sales: $42,400
Cost of Goods Sold: $38,000
Gross Profit: $42,400 - $38,000 = $4,400
Operating Expenses:
Freight Out: $212,000
Insurance Expense: $9,000
Rent Expense: $9,000
Total Operating Expenses: $230,000
Net Income: Gross Profit - Total Operating Expenses
Net Income: $4,400 - $230,000
B) Gross Profit Rate:
Gross Profit Rate = (Gross Profit / Net Sales) * 100
Gross Profit Rate = ($4,400 / $42,400) * 100