Question: Comparative balance sheets report average total assets for
Comparative balance sheets report average total assets for the year of $2,450,000 and average total equity of $1,825,000 (dollar amounts in thousands, except earnings per share).
a. Prepare an income statement for the year in a multiple-step format.
b. Compute the
(1) Gross profit rate,
(2) Net income as a percentage of net sales,
(3) Return on assets, and
(4) Return on equity for the year. (Round computations to the nearest one-tenth of1 percent.)
c. Explain why interest revenue is not included in the company’s gross profitcomputation.
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