Problem
The Alpha Company gathered the following condensed data for the year ended December 31, 2014:
|
Preferred stock dividends paid
|
$50,000
|
|
Net Sales
|
825,000
|
|
Interest revenue
|
10,000
|
|
Selling expenses
|
225,000
|
|
Administrative expenses
|
125,000
|
|
Cost of Goods Sold
|
400,000
|
|
Income tax percentage
|
30%
|
Instructions:
(1) Prepare a multiple-step income statement for the year ended December 31, 2014.
(2) Compute the gross margin percentage and net profit margin ratio. Alpha Company's assets at the beginning of the year were $1,500,000, and the assets were $1,400,000 at the end of the year. To qualify for full credit, you must state the formula you are using, show your computations, and explain your findings.