Calculating the Return on Sales The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Somerville Company Income Statement For the Year Ended December 31, 20X2 Amount Percent Net sales $8,281,989 100.0% Less: Cost of goods sold (5,383,293) 65.0 Gross margin $2,898,696 35.0 Less: Operating expenses (1,323,368) 16.0
Calculating the Return on Sales The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Somerville Company Income Statement For the Year Ended December 31, 20X2 Amount Percent Net sales $8,281,989 100.0% Less: Cost of goods sold (5,383,293) 65.0 Gross margin $2,898,696 35.0 Less: Operating expenses (1,323,368) 16.0
Chapter1: Financial Statements And Business Decisions
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![Calculating the Return on Sales
The income statement, statement of retained earnings, and balance sheet for Somerville Company are as
follows:
Somerville Company
Income Statement
For the Year Ended December 31, 20X2
Amount
Percent
Net sales
$8,281,989
100.0%
Less: Cost of goods sold
(5,383,293)
65.0
Gross margin
$2,898,696
35.0
Less: Operating expenses
(1,323,368)
16.0
Operating income
$1,575,328
19.0
Less: Interest expense
(50,000)
0.6
Income before taxes
$1,525,328
18.4
Less: Income taxes (40%)*
(610,131)
7.4
Net income
$915,197
11.0
Includes both state and federal taxes.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcec60e8f-1165-4b2a-be0e-a0c72e0c06cd%2F95223199-b5c2-408c-8117-d64777ccc8c7%2Fvbio5zii_processed.png&w=3840&q=75)
Transcribed Image Text:Calculating the Return on Sales
The income statement, statement of retained earnings, and balance sheet for Somerville Company are as
follows:
Somerville Company
Income Statement
For the Year Ended December 31, 20X2
Amount
Percent
Net sales
$8,281,989
100.0%
Less: Cost of goods sold
(5,383,293)
65.0
Gross margin
$2,898,696
35.0
Less: Operating expenses
(1,323,368)
16.0
Operating income
$1,575,328
19.0
Less: Interest expense
(50,000)
0.6
Income before taxes
$1,525,328
18.4
Less: Income taxes (40%)*
(610,131)
7.4
Net income
$915,197
11.0
Includes both state and federal taxes.
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