FINANCIAL ACCOUNTING 9TH
16th Edition
ISBN: 9781308821672
Author: Libby
Publisher: MCG/CREATE
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Chapter 5, Problem 5.7E
Preparing a Classified (Multiple-Step) Income Statement
LO5-3
Macy’s, Inc., operates the two best-know n high-end department store chains in North America: Macy’s and Bloomingdale’s. The following data (in millions) were taken from its recent annual report for the year ended February 1:
| Cost of sales | $16,725 |
| Federal, stale, and local income tax expense | 804 |
| Interest expense | 390 |
| Interest income | 2 |
| Net sales | 27,931 |
| Other operating expenses | 88 |
| Selling, general, and administrate expenses | 8,440 |
Required:
Prepare a complete classified (multiple-step) consolidated statement of income for the company (showing gross margin, operating income, and income before income taxes).
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Common-Sized Income Statement
Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. Sorenson Electronics Company data are expressed in dollars. The electronics industry averages are expressed in percentages.
SorensonElectronicsCompany
ElectronicsIndustryAverage
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$1,940,000
100
%
Cost of goods sold
(1,358,000)
(76)
Gross profit
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24
%
Selling expenses
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(9)
%
Administrative expenses
(116,400)
(9)
Total operating expenses
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(18)
%
Operating income
$135,800
6
%
Other revenue and expense:
Other revenue
38,800
4
Other expense
(19,400)
(3)
Income before income tax
$155,200
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Income tax expense
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Net income
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a. Prepare a common-sized income statement comparing the results of operations for Sorenson Electronics Company with the industry average. If…
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Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages.
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$219,200
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Other expense
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Profitability Ratios
East Point Retail, Inc. sells apparel through company-owned retail stores. Recent financial information for East Point follows (in thousands):
Fiscal Year 3
Fiscal Year 2
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$151,500
$(78,000)
Interest expense
3,100
11,700
Fiscal Year 3
Fiscal Year 2
Fiscal Year 1
Total assets (at end of fiscal year)
$1,553,578
$1,477,794
$1,325,332
Total stockholders' equity (at end of fiscal year)
1,186,163
1,162,675
863,299
Assume the apparel industry average return on total assets is 5.0% and the average return on stockholders' equity is 8.0% for the year ended February 2, Year 3.
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Fiscal Year 2
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Chapter 5 Solutions
FINANCIAL ACCOUNTING 9TH
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Explain what a material amount is.Ch. 5 - What basis of accounting (cash or accrual) does...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - For property, plant, and equipment, as reported on...
Ch. 5 - Briefly explain the major classifications of...Ch. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - If average total assets increase, but net income,...Ch. 5 - Prob. 2MCQCh. 5 - Prob. 3MCQCh. 5 - Prob. 4MCQCh. 5 - Prob. 5MCQCh. 5 - Prob. 6MCQCh. 5 - Prob. 7MCQCh. 5 - Prob. 8MCQCh. 5 - Prob. 9MCQCh. 5 - Prob. 10MCQCh. 5 - Prob. 5.1MECh. 5 - Prob. 5.2MECh. 5 - Prob. 5.3MECh. 5 - Prob. 5.4MECh. 5 - Determining Financial Statement Effects of Sales...Ch. 5 - Prob. 5.6MECh. 5 - Prob. 5.7MECh. 5 - Matching Players in the Accounting Communication...Ch. 5 - Prob. 5.2ECh. 5 - Finding Financial Information: Matching...Ch. 5 - Prob. 5.4ECh. 5 - Preparing a Classified Balance Sheet Campbell Soup...Ch. 5 - Prob. 5.6ECh. 5 - Preparing a Classified (Multiple-Step) Income...Ch. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Stock Issuances and the Statement of Stockholders...Ch. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17ECh. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Matching Transactions with Concepts Following are...Ch. 5 - Matching Definitions with Balance Sheet-Related...Ch. 5 - Prob. 5.3PCh. 5 - Prob. 5.4PCh. 5 - Preparing a Classified (Multiple-Step) Income...Ch. 5 - Prob. 5.6PCh. 5 - Determining and Interpreting the Effects of...Ch. 5 - Determining the Effects of Transactions on Ratios...Ch. 5 - Prob. 5.9PCh. 5 - Prob. 5.1APCh. 5 - Preparing a Statement of Stockholders' Equity...Ch. 5 - Prob. 5.3APCh. 5 - Prob. 5.4APCh. 5 - Evaluating the Impact of Transactions on Statement...Ch. 5 - Prob. 5.2CONCh. 5 - Finding Financial Information Refer to the...Ch. 5 - Finding Financial Information Refer to the...Ch. 5 - Prob. 5.3CPCh. 5 - Prob. 5.4CPCh. 5 - Prob. 5.5CPCh. 5 - Prob. 5.6CPCh. 5 - Prob. 5.7CP
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