Chapter 12, Problem 12.11S

(Learning Objective 4: Use ratio data to reconstruct an income statement) A skeleton of Canton Auto Corporation’s income statement appears as follows (amounts in thousands):

	A	B
1	Income Statement
2	Net sales	$ 7.100
3	Cost of goods sold	(a)
4	Selling expenses	1,513
5	Administrative expenses	1,334
6	Interest expense	(b)
7	Other expenses	151
8	Income before taxes	1,046
9	Income tax expense	(c)
10	Net income	$ (d)
11

Use the following ratio data to complete Canton Auto’s income statement:

1. a. The inventory turnover was 3 (beginning inventory was $790; ending inventory was $770).
2. b. The rate of return on sales (after income taxes) was 0.09.