Question: Exercise 5-6 Presented below is information for Zhou Co. for the month of January 2014. Cost of goods sold $204,900 Rent expense $34,700 Freight-out 7,100

Exercise 5-6 Presented below is information for Zhou Co. for the month of January 2014.
Cost of goods sold $204,900 Rent expense $34,700
Freight-out 7,100 Sales discounts 9,280
Insurance expense 14,300 Sales returns and allowances 18,500
Salaries and wages expense 63,300 Sales revenue 397,800

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Prepare an income statement using the multi-step format. Assume a 20% tax rate.
ZHOU Co. Income Statement For the Month Ended January 31, 2014
DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, January 31SalesTotal ExpensesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income Taxes
$
AddLess:
$
DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, January 31SalesTotal ExpensesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income Taxes
DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, January 31SalesTotal ExpensesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income Taxes
DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, January 31SalesTotal ExpensesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income Taxes
DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, January 31SalesTotal ExpensesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income Taxes
DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, January 31SalesTotal ExpensesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income Taxes
DividendsExpensesNet Income / (Loss)Retained Earnings, January 1Retained Earnings, January 31SalesTotal ExpensesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome Before Income Taxes $

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Calculate the profit margin and the gross profit rate. (Round answers to 1 decimal place, e.g. 15.2%.)
Profit margin %
Gross profit rate

%

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