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Wolford Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the companys fiscal year on November 30, 2017, these accounts appeared in its adjusted trial balance.

Accounts Payable		$ 31,088
Accounts Receivable		19,952
Accumulated DepreciationEquipment		78,880
Cash		9,280
Common Stock		40,600
Cost of Goods Sold		712,588
Freight-Out		7,192
Equipment		182,120
Depreciation Expense		15,660
Dividends		13,920
Gain on Disposal of Plant Assets		2,320
Income Tax Expense		11,600
Insurance Expense		10,440
Interest Expense		5,800
Inventory		30,392
Notes Payable		50,460
Prepaid Insurance		6,960
Advertising Expense		38,860
Rent Expense		39,440
Retained Earnings		16,472
Salaries and Wages Expense		135,720
Sales Revenue		1,048,640
Salaries and Wages Payable		6,960
Sales Returns and Allowances		23,200
Utilities Expense		12,296

Additional data: Notes payable are due in 2021.

a) Find income statement

b)Retained earning

c) Balance sheet

d)Calculate the profit margin and the gross profit rate

e)The vice president of marketing and the director of human resources have developed a proposal whereby the company would compensate the sales force on a strictly commission basis. Given the increased incentive, they expect net sales to increase by 15%. As a result, they estimate that gross profit will increase by $46,914 and expenses by $67,976. Compute the expected new net income. Then, compute the revised profit margin and gross profit rate. (Ignore income tax effects.)

Revised net income, revised profit margin and revised gross profit rate

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