Chapter 5, Problem 5.5P

Preparing a Classified (Multiple-Step) Income Statement and Interpreting the Gross Profit

LO5-3 Percentage

Aeropostale. Inc., is a mall-based specialty- retailer of casual apparel and accessories. The company concept is to provide the customer with a focused selection of high-quality, active-oriented fashions at compelling values. The items reported on its income statement for a recent year (ended March 31) axe presented here (dollars in thousands) m alphabetical order

Cost of goods sold	$1,733,916
Interest expense	417
Net revenue	2,342,260
Other selling, general, and administrative expenses	494,829
Provision for income taxes	43,583
Weighted average shares outstanding	81,208

Required:

Prepare a classified (multiple-step) consolidated income statement (showing gross profit, operating income, and income before income taxes). Include a presentation of basic earnings per share. What is the gross profit percentage? Explain its meaning.