Question

ERS Inc. maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2011.
Required:
1. Prepare a single-step income statement for ERS for 2011.
2. Compute net profit margin for ERS. If ERS is able to increase its service revenue by $100,000, what should be the effect on future income?
3. Assume that ERS net profit margin was 8.5% for 2010. As an investor, what conclusions might you draw about ERS’ future profitability?


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  • CreatedSeptember 22, 2015
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