Problem 4. Presented below is information for Zale Co. for the month of January 2018.

Cost of goods sold	$212,000		Rent expense	$32,000
Freight-out	7,000		Sales discounts	8,000
Insurance expense	12,000		Sales returns and allowances	13,000
Salary expense	58,000		Sales	370,000

Instructions

(a) Prepare an income statement.

(b) Calculate the profit margin ratio and the gross profit rate.

Problem 5 (optional). The trial balance of Holland Company at the end of its fiscal year, August 31, 2018, includes these accounts: Beginning Inventory $18,700; Purchases $154,000; Sales Revenue $190,000; Freight-in $8,000; Sales Returns and Allowances $3,000; Freight-out $1,000; and Purchase Returns and Allowances $5,000. The ending merchandise inventory is $19,000.

Instructions

Prepare a cost of goods sold section (periodic system) for the year ending August 31, 2018.