Suppose in its income statement for the year ended June 30, 2025, The Clorox Company reported the following condensed data (dollars in millions).

Instructionsa. Prepare a multiple-step income statement.b. Calculate the gross profit rate and the profit margin and explain what each means.c. Assume the marketing department has presented a plan to increase advertising expenses by $340 million. It expects this plan to result in an increase in both net sales and cost of goods sold of 25%.

Transcribed Image Text:

Salaries and wages expense Depreciation expense Sales revenue Interest expense Advertising expense Sales returns and allowances $ 460 90 5,730 161 499 280 Research and development expense Income tax expense Loss on disposal of plant assets Cost of goods sold Rent expense Utilities expense $ 114 276 46 3,104 105 60