Franco Furniture store is trying to find out the amount of net income or loss for its first year of operation. The Accountant Stacey has suddenly left the job. The owner is supplying you the following information which he has managed to find from the accounts of the business for current year ended 31 December:

Sales revenue (net) $113 040

Cost of goods sold 71 280

Accounts payable 3 200

Interest revenue 870

Cash at bank 32 000

Office supplies expense 720

Office Supplies in hand 200

Rent expense 2 160

Office salaries expense 4 800

Sales salaries expense 9 840

Interest expense 300

Office Equipment 27 000

Depreciation expense: office equipment $ 1 920

Shop Equipment 42 000

Depreciation expense: sales equipment 2 880

Required:

1. Prepare an Income Statement for the current year showing Gross profit and Net profit of the furniture shop.
2. The owner is also concerned about the profitability of the business. Calculate the Gross Profit percentage. Comment on the gross profit performance of the business if the average gross profit margin for the retail furniture business is 25%.
3. Calculate the Net Profit Margin. Would you be happy with this Net profit margin if it was your own business? Why?