The adjusted trial balance of Dredge Company shows these data pertaining to sales at the end of its fiscal year, October 31, 2012: Sales Revenue $900,000; Freight-out $14,000; Sales Returns and Allowances $22,000; and Sales Discounts $13,500. Instructions Prepare the sales revenues section of the income statement. Presented below is information for Yu Co. for the month of January 2012. 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 20,000 Salaries and wages expense 60,000 Sales revenue 370,000
Instructions
(a) Prepare an income statement using the format presented on page 243. Assume a 25% tax rate.
(b) Calculate the profit margin ratio and the gross profit rate.