Question

Traditional ​Mills's income statement appears as follows​ (amounts in​ thousands):

​(Click the icon to view the income​ statement.)Use the following ratio data to complete Traditional ​Mills' income​ statement:1. Inventory turnover was

3.20

​(beginning Merchandise Inventory was

$ 910

ending Merchandise Inventory was

$ 870

2. Profit margin ratio is 12​%.

​(Enter amounts in thousands as provided to you in the problem statement. Round your answer to the nearest​ thousands.)

Traditional Mills
Income Statement
Year Ended December 31, 2018
(in thousands)
Net Sales Revenue	$7,300
Cost of Goods Sold
Selling and Administrative Expenses	1,700
Interest Expense
Other Expenses	110
Income Before Income Taxes	1,325
Income Tax Expense
Net Income

Answer 1

Average merchandise inventory	890	=(910+870)/2
Cost of goods sold	2848	=3.20*890
Net Income	876	=7300*12%
Traditional Mills
Income Statement
Year Ended December 31, 2018
(in thousands)
Net Sales Revenue	7300
Cost of Goods Sold	2848
Selling and Administrative Expenses	1700
Interest Expense	1317	=7300-2848-1700-110-1325
Other Expenses	110
Income Before Income Taxes	1325
Income Tax Expense	449	=1325-876
Net Income	876