8. Selected accounts and other information from the records of Caballero Company for the year ended December 31 follow:

Merchandise Inventory, January 1 20,000 Merchandise Inventory, December 31 24,000 Sales Returns and Allowances 3,000 Store Supplies Expense 4,000 Sales Salaries Expense 41,000 Sales 278,000 Purchases 60,000 Rent Expense 37,000 Sales Commissions Expense 5,500 Freight-in 1,500 Purchases Discounts 400 Depreciation Expense-Office Equipment 3,000 Depreciation Expense-Store Equipment 6,000 Utilities Expense 10,000 Office Salaries Expense 28,000 Interest Expense 650 Interest Income 1,200 INSTRUCTIONS 1. Compute the following items that would appear on a classified income statement. The company combines both selling and general and administrative expenses into a single line, Operating Expenses.

a. Net Sales

b. Cost of Goods Sold

c. Gross Profit

d. Operating Expenses

e. Net income from operations

f. Other income, net g. Net Income for Year 2. Prepare a summarized income statement for Caballero Company for the current year. Use the Condensed Income Statement in Objective 13-1 as an example.

3. Compute the following ratios, rounding to one decimal place:

a. Gross profit percentage

b. Inventory turnover