In 2014, Endeaver Company had net sales of $860,000 and cost of goods sold of $533,200. Operating

Question:

In 2014, Endeaver Company had net sales of $860,000 and cost of goods sold of $533,200. Operating expenses were $221,000, and interest expense was $7,000. Endeaver prepares a multiple-step income statement.

Instructions

(a) Compute Endeaver's gross profit.

(b) Compute the gross profit rate. Why is this rate computed by financial statement users?

(d) If Endeaver prepared a single-step income statement, what amount would it report for net income?

(e) In what section of its classified balance sheet should Endeaver 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...