In its income statement for the year ended December 31, 2010, Maris Company reported the following condensed data.
|
Administrative expenses |
$435,000 |
Selling expenses |
$490,000 |
|
Cost of goods sold |
$987,000 |
Loss on sale of equipment |
83,500 |
|
Interest expense |
68,000 |
Net sales |
$2,050,000 |
|
Interest revenue |
65,000 |
Income tax expense |
$20,000 |
Instructions
(a) Prepare a multiple step income statement.
(b) Calculate the profit margin ratio and gross profit rate.
(c) In 2009 Maris had a profit margin ratio of 5%. Is the decline in 2010 a cause for concern?