Comparative balance sheets report average total assets for the year of $2,450,000 and average total equity of $1,825,000 (dollar amounts in thousands, except earnings per share). a. Prepare an income statement for the year in a multiple-step format. b. Compute the ( 1 ) gross profit rate, ( 2 ) net income as a percentage of net sales, ( 3 ) return on assets, and ( 4 ) return on equity for the year. (Round computations to the nearest one-tenth of 1 percent.) c. Explain why interest revenue is not included in the company’s gross profit computation
Comparative balance sheets report average total assets for the year of $2,450,000 and average total equity of $1,825,000 (dollar amounts in thousands, except earnings per share). a. Prepare an income statement for the year in a multiple-step format. b. Compute the ( 1 ) gross profit rate, ( 2 ) net income as a percentage of net sales, ( 3 ) return on assets, and ( 4 ) return on equity for the year. (Round computations to the nearest one-tenth of 1 percent.) c. Explain why interest revenue is not included in the company’s gross profit computation
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
Comparative
equity of $1,825,000 (dollar amounts in thousands, except earnings per share).
a. Prepare an income statement for the year in a multiple-step format.
b. Compute the ( 1 ) gross profit rate, ( 2 ) net income as a percentage of net sales, ( 3 ) return on
assets, and ( 4 ) return on equity for the year. (Round computations to the nearest one-tenth of
1 percent.)
c. Explain why interest revenue is not included in the company’s gross profit computation
Transcribed Image Text:LINK, INC.
STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2011
Net sales.....
$4,395,253
Costs and expenses:
Cost of goods sold
(2,821,455)
Operating expenses
(1,004,396)
Interest revenue
15,797
Earnings before income tax
$ 585,199
Income tax expense
(204,820)
Net earnings...
Earnings per share..
$ 380,379
$1.70
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