The following information applies to the questions displayed below Emily\'s Gree

Question

The following information applies to the questions displayed below Emily's Greenhouse Corporation is a local greenhouse organized 10 years ago as a corporation. The bookkeeper prepared the following statement (assume that all amounts are correct, but note the incorrect terminology and format EMILY'S GREENHOUSE CORPORATION Profit and Loss December 31 Credit 837000 Debit Sales Cost of Goods Sold Sales Returns and Allowances Sales Discounts Salaries and Wages Expense Office Expense Travel Expenses Income Tax Expense Net Proft $396,000 19,900 19,800 121,000 35,500 10,300 70,350 164,150 Totals $ 837000 $837000 e here to search

Explanation / Answer

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EMILY Green House Corporation Income statement Particulars Amount Amount Sales revenue $837,000 Less: Sales discount -19800 Sales return and allowances -19900 ($39,700) Net sales $797,300 Cost of good sold ($396,000) Gross profit $401,300 Operating expenses: Salaries and wages expense ($121,000) Office expense ($35,500) Travel expense ($10,300) ($166,800) Income from operations $234,500 Income tax expense ($70,350) Net income $164,150 2 EMILY Green House Corporation Income statement Particulars Amount Amount Net sales $797,300 Cost of good sold ($396,000) Gross profit $401,300 Operating expenses Salaries and wages expense ($121,000) Office expense ($35,500) Travel expense ($10,300) ($166,800) Income from operations $234,500 Income tax expense ($70,350) Net income $164,150 3 Gross profit Margin = (Gross profit/net sales)*100 (401300/797300)*100% 0.503323718 50.33%

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