301C5gpQ - Hint: cross out unneeded information before you...

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1 Acct 301 Chapter 5 Group Activity 301C5gpQ.doc/dec’07/Burbage Preparation of Multiple-Step Income Statement and Ratio Calculations 1. Using the account information below prepare, in good form, a complete multiple step income statement for the Acme Corporation for the year ended December 31, 2007. Be sure to include a detailed cost of goods sold section in the body of the statement and a proper heading for your statement. Also, list the operating expenses in alphabetical order! 2. When you have completed preparing the income statement calculate the Gross Profit Rate and the Profit Margin Percentage. Use only the information needed (there is some unneeded information.)
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Unformatted text preview: Hint: cross out unneeded information before you start the statement. Merchandise inventory, Jan 1, 2007 14,000 Merchandise inventory, Dec 31, 2007 12,000 Income tax expense 9,000 Sales returns and allowance 6,000 Prepaid insurance 6,000 Accounts payable 20,000 Accumulated depreciation 80,000 Net purchases 320,000 Gain on sale of land 4,000 Sales Revenue 460,000 Office equipment 100,000 Freight-out 8,000 Cash 28,000 Depreciation 10,000 Interest revenue 2,000 Rent expense 16,000 Sales discounts 4,000 Salaries expense 30,000 Advertising expense 17,000 Common stock 50,000 Interest expense 1,000 Loss on sale of equipment 3,000...
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