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# hmwk+05 - Young Suk Choi(24808709 MGMT 30A D7 HW#5 E5-6...

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Young – Suk Choi (24808709) MGMT 30A D 7 HW #5 E5-6. Presented below is information for Zales Co. for the month of January 2007. Cost of goods sold \$212,00 0 Rent expense \$32,00 0 Freight-out 7,000 Sales discounts 8,000 Insurance expense 12,000 Sales returns and allowances 13,000 Salary expense 58,000 Sales 370,00 0 Instructions a. Prepare an income statement using the format presented on page 232. Sales Revenue Sales 370,000 Less; returns and allowances 13,000 discounts 8,000 21,000 Net sales 349,000 Cost of Goods Sold 212,000 Gross Profit 137,000 Operating Expense Insurance expense 12,000 Salary expense 58,000 Freight-out 7,000 Rent expense 32,000 109,000 Net Income 28,000 b. Calculate the profit margin ratio and the gross profit rate. Profit margin: net income / net sales = 28,000 / 349,000 = 8% Gross profit rate: gross profit / net sales = 137,000 / 349,000 = 39.26%

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E5-8. In its income statement for the year ended December 31, 2007, Knitz Company reported the following condensed data. Administrative expenses \$435,00 0 Selling expenses \$ 690,000 Cost of goods sold 987,000 Loss on sale of equipment 83,500 Interest expense 68,000 Net sales 2,350,00 0 Interest revenue 45,000 Instructions a. Prepare a multiple-step income statement.
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## This note was uploaded on 04/22/2008 for the course MGMT 30B taught by Professor Tian during the Winter '08 term at UC Irvine.

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hmwk+05 - Young Suk Choi(24808709 MGMT 30A D7 HW#5 E5-6...

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