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1 Acct 301 Extra Credit Activity 301C5xcr.doc/dec’08/Burbage Preparation of Multiple-Step Income Statement and Ratio Calculations (5 points) 1. Using the account information below prepare, in good form, a complete multiple step income statement for the Prepare It Right Corporation for the year ended December 31, 2008. Be sure to include a detailed cost of goods sold section in the body of the statement and a proper heading for your statement. The operating expenses may be listed in any order. 2. When you have completed preparing the income statement calculate the Gross Profit Rate and the Profit Margin Percentage. Put your answers below the income statement and round to 3 significant digits. 3. This project must be typed using a computer and either word processing or spreadsheet software. Print out your answer and hand it in no later than the beginning of class on the due date shown on your homework schedule. You may collaborate (work with) other students but each person must type their own
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Unformatted text preview: answer! Keep your electronic file in case the instructor asks for it at a later date. 4. If your answer has more than one minor error you will not receive any extra credit. Therefore, pay close attention to the details of the problem and your answer! REMEMBER TO USE YOUR RESOURCES: the text book, my webpage, and other examples provided. Interest expense 4,000 Merchandise inventory, Jan 1, 2008 10,000 Income tax expense 7,000 Utilities expense 7,000 Prepaid insurance 9,000 Accounts payable 22,000 Accumulated depreciation 67,000 Net purchases 440,000 Common stock 60,000 Sales Revenue 600,000 Office equipment 200,000 Freight-out 10,000 Cash 30,000 Rent expense 27,000 Retained earnings 25,000 Sales discounts 2,000 Wages expense 33,000 Property taxes expense 13,000 Merchandise inventory, Dec 31, 2008 14,000 Sales returns and allowance 18,000 Accounts receivable 15,000...
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