In its income statement for the year ended December 31, 2001, Violin Company reported the following condensed data:

Instructions

(a) Prepare a multiple-step income statement.

(b) Calculate the profit margin ratio, gross profit rate, and operating expenses to sales ratio.

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Administrative expenses Cost of goods sold Interest expense Interest revenue $435,000 Selling expenses $690,000 989,000 Loss on sale of equipment 10,000 70,000 Net sales 2,350,000 45,000