Suppose you manage Campbell Appliance. The store€™s summarized financial statements for 2012, the most recent year, follow:

Assume that you need to double net income. To accomplish your goal, it will be very difficult to raise the prices you charge because there is a Best Buy nearby. Also, you have little control over your cost of goods sold because the appliance manufacturers set the price you must pay.
Requirement
1. Identify several strategies for doubling net income.(Challenge)

Transcribed Image Text:

CAMPBELL APPLIANCE Income Statement Year Ended December 31, 2012 Sales Cost of goods sold Gross profit Operating expenses Net income $800,000 660,000 $140,000 100,000 $ 40,000 CAMPBELL APPLIANCE Balance Sheet December 31, 2012 Liabilities and Equity $ 35,000 Assets $ 30,000 Accounts payable 75,000 Note payable 360,000 Total liabilities Stockholders' equity $465,000| Total liabilities and equity Cash Inventories 280,000 Land and buildings, net $315,000 150,000 Total assets $465,000