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CP 6-4 Chapter 6 Accounting for Merchandising Businesses 341 CP 6-3 Team Activity In teams, select a public company that interests you. tain the company's
CP 6-4
Chapter 6 Accounting for Merchandising Businesses 341 CP 6-3 Team Activity In teams, select a public company that interests you. tain the company's most recent annual report on Form 10-KThe Form 10-K is a company's annually required filing with the Securities and Exchange Commission (SEC). It includes the company's financial statements and accompanying notes. The Form 10-K can be obtained either (a) from the investor relations section of the company's website or (b) by using the company search feature of the SECS EDGAR database service found at www.secgon/edgar/scarchedgar/ companysearch html. 1. Based on the information in the company's most recent annual report, determine each of the following for all the years presented a. Gross profit b. Gross profit rate (Gross profit Sales) C Income from operations d. Percentage change in income from operations e. Net income f. Percentage change in net income 2 Based solely on your responses to item 1, has the company's performance improved, remained constant, or deteriorated over the periods presentedP Briefly explain your answer Suzi Nomro operates Watercraft Supply Company, an online boat parts distributorship that is in its third year of operation. The following income statement was prepared for the year ended October 31, 2019. on Income Statement For the Year Ended October 31, 2019 Revenues Sales $1,350,000 Total revenues 1,365.000 Cost of merchandse sold... Selling expenses 810,000 140,000 90,000 Interest expense. Total expenses... Suzi is considering a proposal to increase net income by offering sales discounts of 2/15, n/30 and by shipping all merchandise FOB shipping point. Currently, no sales dis- counts are allowed and merchandise is shipped FOB destination. It is estimated that the new terms will increase sales by 10%. The ratio of the cost of merchandise sold to sales is expected to be 60%All selling and administrative expenses are expected to remain unchanged, except for store supplies and miscellaneous selling expenses, which are ex pected to increase proportionately with increased sales. The amounts of these items for the year ended October 31, 2019, were as follows 12000 6,000 Store supplies expense The interest revenue and expense items will remain unchanged. The shipment of all merchandise FOB shipping point will eliminate all delivery expenses, which for the year ended October 31, 2019, were $12,000 Step by Step Solution
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