Question: Comparative balance sheets report average total assets for the year of $2,575,000 and average total equity of $1,917,000 (dollar amounts in thousands, except earnings per

Comparative balance sheets report average total assets for the year of $2,575,000 and average total equity of $1,917,000 (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 of 1 percent.)

c. Explain why interest revenue is not included in the company’s gross profit computation.

SPINX, INC. STATEMENT OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2015 Net sales ... $4,395,253 Costs and expenses: Cost

SPINX, INC. STATEMENT OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2015 Net sales ... $4,395,253 Costs and expenses: Cost of goods sold Operating expenses (2,821,455) (1,004,396) Interest revenue 15,797 $ 585,199 (204,820) $ 380,379 Earnings before income tax Income tax expense Net earnings ... $1.70 Earnings per share

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