The following information is available for the Entity A: Sales revenue Sales returns and allowances Sales discounts

The following information is available for the Entity A:

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Sales revenue Sales returns and allowances Sales discounts Cost of goods sold Operating expenses Interest expense Loss on sale of equipment Interest revenue $618,000 15,000 5,000 398,000 114,000 15,000 4,000 20,000 Instructions 1. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2020. The income tax rate is 30%. 2. Compute the profit margin and the gross profit rate. 3. Suggest at least three ways these measures might be improved and net income increased. Sales revenue Sales returns and allowances Sales discounts Cost of goods sold Operating expenses Interest expense Loss on sale of equipment Interest revenue $618,000 15,000 5,000 398,000 114,000 15,000 4,000 20,000 Instructions 1. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2020. The income tax rate is 30%. 2. Compute the profit margin and the gross profit rate. 3. Suggest at least three ways these measures might be improved and net income increased.

Answer rating: 100% (QA)

2 Profit Margin Net Income Net Sales 60900 598000 1018 Gross profit rate Gross Profi... View the full answer