Question

Presented below is information for Concord Company for the month of March 2020.

Cost of goods sold		$221,920		Rent expense		$33,370
Freight-out		6,410		Sales discounts		8,470
Insurance expense		5,440		Sales returns and allowances		12,520
Salaries and wages expense		55,970		Sales revenue		390,680

Prepare a multiple-step income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

CONCORD COMPANY Income Statement March 31, 2020For the Month Ended March 31, 2020For the Year Ended March 31, 2020
DrawingsNet Income / (Loss)Owner's Capital, March 1Owner's Capital, March 31SalesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating Expenses
			$
LessAdd :
		$
Drawings    Net Income / (Loss)    Owner's Capital, March 1    Owner's Capital, March 31    Sales Revenues    Total Revenues    Net Sales    Gross Profit    Operating Expenses    Total Operating Expenses
DrawingsNet Income / (Loss)Owner's Capital, March 1Owner's Capital, March 31Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating Expenses
DrawingsNet Income / (Loss)Owner's Capital, March 1Owner's Capital, March 31Sales RevenuesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating Expenses
Drawings    Net Income / (Loss)    Owner's Capital, March 1    Owner's Capital, March 31    Sales Revenues    Total Revenues    Net Sales    Gross Profit    Operating Expenses    Total Operating Expenses
Drawings    Net Income / (Loss)    Owner's Capital, March 1    Owner's Capital, March 31    Sales Revenues    Total Revenues    Net Sales    Gross Profit    Operating Expenses    Total Operating Expenses			$

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Compute the gross profit rate. (Round answer to 2 decimal places, e.g. 25.20%.)

Gross profit rate

%

Answer 1

Answer
1) Multiple step income statement
Sales revenue	$390,680
Less; Sales discount	-$    8,470
Less; Sales return and allowance	-$ 12,520
Net Sales		$369,690
Cost of goods sold		$221,920
Gross profit		$147,770
Operating expense
Freight out	$    6,410
Insurance expense	$    5,440
Salaries and wages expense	$ 55,970
Rent expense	$ 33,370
Total operating expense		$101,190
Operating income		$ 46,580
Gross profit rate = 147,770 / 369,690 = 39.97%