#12 please the whole thing

percent Depreciation expense for the year borrowed $100,000 on January 1, 2010, on which the company paid 10 interest. Both the interest and principal of the loan were paid on December 31, 2010. The publishing firm's tax rate is 30 percent. Did Stein Books make a profit in 2010? Please verify with an income statement presented in good form. nination of bility Intermediate Problems 12. Lemon Auto Wholesalers had sales of $700,000 in 2010 and cost of goods sold represented 70 percent of sales. Selling and administrative expenses were 12 percent of sales. Depreciation expense was $10,000 and interest expense for the year was $8,000. The firm's tax rate is 30 percent. a. Compute earnings after taxes. b. Assume the firm hires Ms. Carr, an efficiency expert, as a consultant. She suggests that by increasing selling and administrative expenses to 14 percent of sales, sales can be increased to $750,000. The extra sales effort will also reduce cost of goods sold to 66 percent of sales (there will be a larger markup in prices as a result of more aggressive selling). Depreciation expense will remain at $10,000. However, more auto- mobiles will have to be carried in inventory to satisfy customers, and interest expense will go up to $15,000. The firm's tax rate will remain at 30 percent. Compute revised earnings after taxes based on Ms. Carr's suggestions for Lemon Auto Wholesalers. Will her ideas increase or decrease profitability? 13. Classify the following balance sheet items as current or noncurrent: heet Petained earnings Bonds nayable