In the income statements of three companies. Cost of Goods Operating Nonoperating Income Tax Company Henry Net Sales Sold Expenses Expenses Expense $42,000 $10,500 $5,500 $2,500 $2,500 Grace 45,000 29,700 16,600 7,500 0 James 50,000 29,000 3,500 0 3,500 Required: 1. For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) net income. 2-a. For each company, calculate the gross profit ratio. 2-b. Which company has the most favorable ratio? Complete this question by entering your answers in the tabs below. Req 1 Req 2a Req 2b Which company has the most favorable ratio? Which company has the most favorable ratio? < Req 2a Req 2b >
In the income statements of three companies. Cost of Goods Operating Nonoperating Income Tax Company Henry Net Sales Sold Expenses Expenses Expense $42,000 $10,500 $5,500 $2,500 $2,500 Grace 45,000 29,700 16,600 7,500 0 James 50,000 29,000 3,500 0 3,500 Required: 1. For each company, calculate (a) gross profit, (b) operating income, (c) income before income taxes, and (d) net income. 2-a. For each company, calculate the gross profit ratio. 2-b. Which company has the most favorable ratio? Complete this question by entering your answers in the tabs below. Req 1 Req 2a Req 2b Which company has the most favorable ratio? Which company has the most favorable ratio? < Req 2a Req 2b >
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 19BEA
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Step 1: Introduce to income statement
VIEWStep 2: Working for gross profit and gross profit ratio of each company
VIEWStep 3: Working for operating income for each company
VIEWStep 4: Working for income before income tax for each company
VIEWStep 5: Working for net income for each company
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