Question

The following is a listing of some of the balance sheet accounts and all of the income statement accounts for Aldine Inc. as they appear on the company’s adjusted trial balance.

Accounts Payable	$ 18,000
Accounts Receivable	30,000
Inventory	23,800
Advertising Expense	21,500
Cost of Goods Sold	165,000
Delivery Expense	7,900
Income Tax Expense	3,700
Insurance Expense	1,000
Rent Expense	19,600
Sales Revenue	350,000
Sales Discounts	9,100
Sales Returns and Allowances	47,500

Net income would be

Income from Operations would be

The gross profit percentage would be closest to:

Answer 1

Aldine Inc.
Income statement
Sales revenue	$ 350,000
Less: Sales discount	$ 9,100
Less: Sales Returns and Allowances	$ 47,500
Net sales		$ 293,400
Less: Cost of goods sold		$ 165,000
Gross profit		$ 128,400
Operating expenses:
Delivery expense	$ 7,900
Rent expense	$ 19,600
Advertising expense	$ 21,500
Insurance expense	$ 1,000
Total operating expenses		$ 50,000
Operating income		$ 78,400
Income tax expense		$ 3,700
Net income		$ 74,700

.

The gross profit percentage would be closest to = Gross profit ÷ Net sales

= $128,400 ÷ $293,400

= 43.76%