In 2012, James Ford Company had net sales of $900,000 and cost of goods sold of $522,000.

Question:

In 2012, James Ford Company had net sales of $900,000 and cost of goods sold of $522,000. Operating expenses were $225,000, and interest expense was $11,000. Ford prepares a multiple-step income statement.
Instructions
(a) Compute Ford’s gross profit.
(b) Compute the gross profit rate. Why is this rate computed by financial statement users?
(c) What is Ford’s income from operations and net income?
(d) If Ford prepared a single-step income statement, what amount would it report for net income?
(e) In what section of its classified should Ford report merchandise inventory?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...