Below are amounts found in the income statements of three companies. Cost of Goods Operating Company Henry Grace James Net Sales $22,000 25,000 30,000 Sold $4,400 18,500 Expenses $4,500 7,500 Nonoperating Expenses $1,500 Income Tax Expense $1,500 3,500 0 19,800 2,500 2,500 Required: 1. For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) net income. 2-a. For each company, calculate the gross profit ratio. 2-b. Which company has the most favorable ratio?
Below are amounts found in the income statements of three companies. Cost of Goods Operating Company Henry Grace James Net Sales $22,000 25,000 30,000 Sold $4,400 18,500 Expenses $4,500 7,500 Nonoperating Expenses $1,500 Income Tax Expense $1,500 3,500 0 19,800 2,500 2,500 Required: 1. For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) net income. 2-a. For each company, calculate the gross profit ratio. 2-b. Which company has the most favorable ratio?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Below are amounts found in the income statements of three companies.
Company
Henry
Net Sales
Cost of Goods
Sold
Operating
Grace
James
$22,000
25,000
30,000
$4,400
18,500
19,800
Expenses
$4,500
7,500
2,500
Nonoperating
Expenses
Income Tax
$1,500
Expense
$1,500
3,500
0
0
2,500
Required:
1. For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) net income.
2-a. For each company, calculate the gross profit ratio.
2-b. Which company has the most favorable ratio?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2a
Req 2b
For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) net income.
(Negative amounts should be indicated by a minus sign.)
Gross Profit
Operating
Income
Income Before
Income Taxes
Net Income /
Loss
Henry
Grace
James
Req 1
Req 2a >
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