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The adjusted trial balance of Gertz Company included the following selected accounts:

The adjusted trial balance of Gertz Company included the following selected accounts:


Debit
Credit

Sales

$575,000

Sales Returns and Allowances
$ 50,000


Sales Discounts
9,500


Cost of Goods Sold
347,000


Freight-out
2,000


Advertising Expense
15,000


Interest Expense
19,000


Store Salaries Expense
74,000


Utilities Expense
18,000


Depreciation Expense
3,500


Interest Revenue

25,000


Instructions
(1). Use the above information to prepare a multiple-step income statement for the year ended December 31, 2007.
(2). Calculate the profit margin ratio and gross profit rate. To qualify for full credit, you must state the formula you are using, show your computations, and explain your findings. (Points: 25)

Top Answer

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549327_ACC.doc

(a)
Gertz Company
Income statement
Sales $575,000 Less: Sales Return
Sales Discount $50,000
$ 9,500 $59,500 Net sales $515,500 Less: Cost of goods sold $347,000
----------Gross Profit $168,500...

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