10. Presented below is information for bach company for the month of march 2014.
Cost of goods sold =212,000
freight -out =9,000
insurance expense =6,000
salaries and wages expense =58,000
rent expense =32,000
Sales discounts=6,600
sales returns and allowances =13,000
sales revenue =380,000
Instructions.
A, prepare an income statement.
B, compute the gross profit rate.
A) Income Statement:
Revenue:
Sales Revenue $380,000
Less: Sales Discounts ($6,600)
Less: Sales Returns and Allowances ($13,000)
Net Sales Revenue $360,400
Cost of Goods Sold $212,000
Gross Profit $148,400
Expenses:
Freight-out $9,000
Insurance Expense $6,000
Salaries and Wages Expense $58,000
Rent Expense $32,000
Total Expenses $105,000
Net Income $43,400
B) Gross Profit Rate: Gross Profit / Net Sales Revenue
Gross Profit Rate = $148,400 / $360,400
Gross Profit Rate = 0.4116 (or 41.16%)