Rowbuck Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company’s fiscal year on November 30, 2001, these accounts appeared in its adjusted trial balance:

Additional data: Notes payable are due in 2005.
Instructions

(a) Prepare a multiple-step income statement, a retained earnings statement, and a clas- sified balance sheet. (Do not separate operating expenses into selling and administrative categories.)

(b) Calculate the return on assets ratio, profit margin ratio, gross profit rate, and oper- ating expenses to sales ratio. Assume that total assets at the beginning of the year were $160,000.

Transcribed Image Text:

Accounts Payable Accounts Receivable Accumulated Depreciation-Delivery Equipment Accumulated Depreciation-Store Equipment Cash $ 27,310 11,770 19,680 41,800 8,000 Common Stock 30,000 Cost of Goods Sold 633,220 Delivery Expense 8,200 Delivery Equipment 57,000 Depreciation Expense-Delivery Equipment 4,000 Depreciation Expense-Store Equipment 9,500 Dividends 12,000 Insurance Expense 9,000 Interest Expense Interest Revenue Merchandise Inventory Notes Payable Prepaid Insurance Property Tax Expense Rent Expense 8,000 5,000 36,200 46,000 4,500 3,500 29,000 Retained Earnings 14,200 Salaries Expense 110,000. Sales 910,000 Sales Commissions Expense 14,000 Sales Commissions Payable 6,000 Sales Returns and Allowances 10,000 Store Equipment 125,000 Property Taxes Payable 3,500 Utilities Expense 10,600