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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

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 51E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...
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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

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
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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