Problem:
Presented below is information for Zales Co. for the month of January 2007
Cost of goods sold = 212,000 Rent expense = 32,000
Freight out = 7,000 Sales discount = 8,000
Insurace expense = 12,000 Sales returns and allowances = 13000
Salary expense = 58,000 Sales = 370,000
A) Prepare an income statement
B) Calculate the profit margin ratio and the gross profit rate.