Presented below is information for Obley Company for the year ended March 31, 20
ID: 2365161 • Letter: P
Question
Presented below is information for Obley Company for the year ended March 31, 2010. Cost of goods sold $212,000 Rent expense $32,000 Freight-out 7,000 Sales discounts 8,000 Insurance expense 12,000 Sales returns and allowances 13,000 Salary expense 58,000 Sales 370,000 Instructions (a) Prepare a multiple-step income statement. (List amounts from largest to smallest eg 10, 5, 3, 2.) OBLEY COMPANY Income Statement For the Year Ended March 31, 2010 Sales revenues $ Less: $ Net sales Gross profit Operating expenses Total operating expenses Net income $ (b) Compute the gross profit rate. (Round answer to 2 decimal places, e.g. 10.50.) % Click here if you would like to Show Work for this questionExplanation / Answer
r Obley Company for the year ended March 31, 2010. Cost of goods sold $212,000 Rent expense $32,000 Freightout 7,000 Sales discounts 8,000 Insurance expense 12,000 Sales returns and allowances 13,000 Salary expense 58,000 Sales 370,000 Instructions (a) Prepare a multiplestep income statement.
OBLEY COMPANY Income Statement For the Year Ended March 31, 2010
Sales 370,000
Less: Sales Returns and Allowances
Less: Sales Net Discounts Sales
Less: Cost of Goods Sold
Less: Freight Out
Gross Profit
Less Operating Expenses:
Salary expense 58,000
Rent Expense
Insurance Expense
Total Operating Expense
Net Income
$370,000
$21,000
$349,000
$219,000
$130,000
$13,000
$8,000
$212,000
$7,000
$58,000
$32,000
$12,000
$102,000
$28,000
(b) Compute the gross profit rate.
Gross Profit Rate = Gross Profit Net Sales Gross Profit Rate = $130,000 /$349,000
Gross Profit Rate = 0.3725
Gross Profit Rate = 37.25%
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