Exercise #2

Prepare a classified income statement.

Presented below is information for Baker Company for the month of March 2014.

Cost of goods sold	$212,000	Rent expense	$ 32,000
Freight-out	9,000	Sales discounts	6,600
Insurance expense	6,000	Sales returns and allowances	13,000
Salaries and wages expense	58,000	Sales revenue	380,000

Instructions

(a)	Prepare a classified income statement.
(b)	Compute the gross margin rate.