Presented below is information for Yu Co. for the month of January 2012.

Cost of goods sold ...... $212,000

Rent expense ........ $32,000

Freight-out .......... 7,000

Sales discounts ......... 8,000

Insurance expense ........ 12,000

Sales returns and allowances .... 20,000

Salaries and wages expense ... 60,000

Sales revenue ........ 370,000

Instructions

(a) Prepare an income statement using the format presented on page 243. Assume a 25% tax rate.

(b) Calculate the profit margin ratio and the gross profit rate.