E$5\mathrm{.}14($LO $5),$ AP In $2027,$ Matt Cruz Company had net sales of $$900,000$ and cost of goods sold of $$522,000.$ Operating expenses were $$225,000,$ and interest expense was $$11,000.$ Cruz prepares a multiple$-$ step income statement.

Instructions

a$.$ Compute Cruz's gross profit.

b$.$ Compute the gross profit rate. Why is this rate computed by financial statement users?

c$.$ What is Cruz's income from operations and net income?

d$.$ If Cruz prepared a single$-$step income statement, what amount would it report for net income? e$.$ In what section of its classified balance sheet should Cruz report inventory? E$5\mathrm{.}14($LO $5),$ AP In $2027,$ Matt Cruz Company had net sales of $\backslash (\backslash$$ $900,000\backslash )$ and cost of goods sold of $\backslash (\backslash$$ $522,000\backslash ).$ Operating expenses were $\backslash (\backslash$$ $225,000\backslash ),$ and interest expense was $\backslash (\backslash$$ $11,000\backslash ).$ Cruz prepares a multiplestep income statement.

Instructions

a$.$ Compute Cruz's gross profit.

b$.$ Compute the gross profit rate. Why is this rate computed by financial statement users?

c$.$ What is Cruz's income from operations and net income?

d$.$ If Cruz prepared a single$-$step income statement, what amount would it report for net income?

e$.$ In what section of its classified balance sheet should Cruz report inventory?