Also please include gross profit rate and profit margin for second income statement thank you ## Understanding Financial StatementsIn this segment, we will delve into creating a multi-step income statement, understanding gross profit rates, and profit margins. The analysis provided will guide learners to effectively assess financial data and interpret the fiscal health of a firm.### Gross Profit Rate and Profit Margin Calculations**Calculate the gross profit rate and the profit margin.** (Round answers to 1 decimal place, e.g., 15.2%)- **Gross profit rate:** - Input field: $ \_\_\_\_\%$- **Profit margin:** - Input field: $ \_\_\_\_\%$### Exercises### Scenario 1: Impact of Increased Advertising ExpensesAssume the marketing department has proposed a plan to increase advertising expenses by $340 million. It anticipates this plan will result in an increase in both net sales and the cost of goods sold of 25%. (Hint: Increase both sales revenue and sales returns and allowances by 25%) Read parts (a) and (b) and discuss whether this plan has merit. (Assume a tax rate of 30%, and round all amounts to whole dollars.)### Multi-Step Income Statement PreparationPrepare a multi-step income statement. (Round answers to 0 decimal places, e.g., 15,222.)#### The Clorox Company Income Statement(amounts in millions)**____**- $ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ : (blank input field)**Net Sales**- Input field: $ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$**Cost of Goods Sold**- Cost of Goods Sold: Input field: $ \_\_\_\_\_\_\_\_\_\_\_\_\_$ - Gross profit: $ \$ \_\_\_\_\_\_\_\_\_\_\_\_$**Operating Expenses**- Input field $ \_\_\_\_\_\_\_\_\_\_\_\_$ : (drop-down menu input field) - Selling expenses: Input field: $ \_\_\_\_\_\_\_\_\_\_$ - Administrative expenses: Input field: $ \_\_\_\_\_\_\_\_\_\_$ - Total operating expenses: $ \$ \_\_\_\_\_\_\_\_\_\_$ - Income from operations: \( \$ \_\_\_\_\ ### The Clorox Company Income Statement ExplanationTo help you understand how to prepare a multi-step income statement, The Clorox Company's income data for the year ended June 30, 2022, has been utilized. The provided data (in millions of dollars) is as follows:- **Salaries and wages expenses:** $460- **Depreciation expense:** $90- **Sales revenue:** $5,730- **Sales discounts:** $161- **Advertising expenses:** $109- **Sales returns and allowances:** $280- **Research and development expenses:** $114- **Income tax expense:** $276- **Loss on disposal of plant assets:** $46- **Cost of goods sold:** $3,104- **Rent expense:** $105- **Utilities expense:** $60**Assume a tax rate of 34%.**#### Income Statement Preparation:Below is the detailed structure of the multi-step income statement:1. **Gross Profit Calculation:** - **Sales Revenue:** $5,730 - **Less: Sales Returns and Allowances:** $280 - **Net Sales:** $5,450 ($5,730 - $280) - **Less: Cost of Goods Sold (COGS):** $3,104 - **Gross Profit:** $2,346 ($5,450 - $3,104)2. **Operating Expenses Calculation:** - **Selling and Administrative Expenses:** - **Salaries and Wages Expense:** $460 - **Advertising Expense:** $109 - **Depreciation Expense:** $90 - **Research and Development Expense:** $114 - **Rent Expense:** $105 - **Utilities Expense:** $60 - **Total Operating Expenses:** $938 ($460 + $109 + $90 + $114 + $105 + $60)3. **Operating Income Calculation:** - **Gross Profit:** $2,346 - **Less: Total Operating Expenses:** $938 - **Income from Operations:** $1,408 ($2,346 - $938)4. **Other Expenses and Losses Calculation:** - **Income Expense:** $161 - **Loss on Disposal of Plant Assets:** $46 - **Total Other Expenses and Losses:** $207 ($161 + $

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Suppose in its income stat The Corox Company reportad the foloving condensed data (dollars in millions). Salaries and wagesepensas $460 Rasearch and development epense $114 Depreciation erpensa 90 Income tax epanse 276 Sales revenua 5,730 Lass on disposal of plant assets 46 Interest erpense 161 Cost of goods sold 3.104 Advertising epense 499 Rent erpense 105 Sales returns and allovances 280 Uslities erpense 60 Assume a taxrate of 34%. Your answer is partially correct Prepare a muitiplestep income statemant. (Round answers to O decimal places,es 15222) The Clorox Company Income Statement For the Month Ended June 20. 2022 (amounts in millions) anue 6230 Salea Raturna and Alloanc 230 6000 ds Sold 3000 3000 Expenses aWages Expense Son Expense Expene 499I and Development Expense 114 105 I nse xpense rating Expenses 1328 mOperationa 1627 anaes and Losses xpense 161 I sposal of Plant Assets ore income Taxs 1465 Expense 498 /Los 967

Suppose in its income stat The Corox Company reportad the foloving condensed data (dollars in millions). Salaries and wagesepensas $460 Rasearch and development epense $114 Depreciation erpensa 90 Income tax epanse 276 Sales revenua 5,730 Lass on disposal of plant assets 46 Interest erpense 161 Cost of goods sold 3.104 Advertising epense 499 Rent erpense 105 Sales returns and allovances 280 Uslities erpense 60 Assume a taxrate of 34%. Your answer is partially correct Prepare a muitiplestep income statemant. (Round answers to O decimal places,es 15222) The Clorox Company Income Statement For the Month Ended June 20. 2022 (amounts in millions) anue 6230 Salea Raturna and Alloanc 230 6000 ds Sold 3000 3000 Expenses aWages Expense Son Expense Expene 499I and Development Expense 114 105 I nse xpense rating Expenses 1328 mOperationa 1627 anaes and Losses xpense 161 I sposal of Plant Assets ore income Taxs 1465 Expense 498 /Los 967

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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