50.1K

Verified Solution

Link Copied!

MGMT FFAC There is a Part A and Part B to this CE-do them both! Part A. The following information is available for Entity A: Sales revenue Sales returns and allowances Sales discounts Cost of goods sold Operating expenses Interest expense Gain on sale of equipment Interest revenue Ch 5: Exercises; and Review Over Entries $924,330 10,000 7,800 546,250 200,400 11,000 9,300 3,500 Instructions 1. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2024. Please look at Illustration 5.12 in the text for an example. The income tax rate is 23% (round to the nearest dollar). Check figures: Income from operations is $159,880. Net income is $124,494. 2. Compute the profit margin and the gross profit rate (round to two decimals). Show and label calculations. 3. Suggest at least three ways these measures might be materially improved and net income increased. Be sure to consider the relationship between net sales, cost-of- goods-sold and gross profit as well as operating expenses.

MGMT FFAC Ch 5: Exercises; and Review Over Entries There is a Part A and Part B to this CE - do them both! Part A. The following information is avallable for Entity A: Instructions 1. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2024. Please look at Illustration 5.12 in the text for an example. The income tax rate is 23% (round to the nearest dollar). Check figures: Income from operations is $159,880. Net income is $124,494. 2. Compute the profit margin and the gross profit rate (round to two decimals). Show and label calculations. 3. Suggest at least three ways these measures might be materially improved and net income increased. Be sure to consider the relationship between net sales, cost-ofgoods-sold and gross profit as well as operating expenses. Part B: Entity B had the following transactions/events. Assume a perpetual inventory system. Make the following entries below. 1. Entity B sold Entity C$45,000 of merchandise, terms 3/10, net 30 . The merchandise cost Entity B$30,000 2. Entity B paid its monthly rent of $1,500. 3. At the end of last month, Entity B purchased $600 of supplies on credit and made the proper journal entry. It will now pay for those supplies. 4. A count of the supplies indicates that only $200 are left. (Make the appropriate adjusting entry). 5. Entity C (see item 1) paid Entity B for the merchandise it bought and did so 9 days after the invoice date

Answer & Explanation Solved by verified expert

See Answer