Comparative balance sheets report average total assets for the year of $2,450,000 and average total equity of $1,825,000 (dollar amounts in thousands, except earnings per share).

a. Prepare an income statement for the year in a multiple-step format.

b. Compute the

(1) Gross profit rate,

(2) Net income as a percentage of net sales,

(3) Return on assets, and

(4) Return on equity for the year. (Round computations to the nearest one-tenth of1 percent.)

c. Explain why interest revenue is not included in the company’s gross profitcomputation.

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LINK, INC. STATEMENT OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2011 Net sales $4,395,253 Costs and expenses Cost of goods sold (2,821,455) 1,004,396) 15,797 .585,199 (204,820) $ 380,379 $1.70 Operating expenses Interest revenue Earnings before income tax Income tax expense Net earnings-..aw ········ Earnings per share