Question
In 2015, Brik-o-Store, Inc. (a hardware retail company) sold 10,000 units of its product at an average price of $380 per unit. Brik-o-Store purchased 11,000
In 2015, Brik-o-Store, Inc. (a hardware retail company) sold 10,000 units of its product at an average price of $380 per unit. Brik-o-Store purchased 11,000 units of its product from its manufacturer in 2015 at an average cost of $300 per unit. Operating expenses (excluding depreciation) for Brik-o-Store, Inc. in 2015 were $400,000 and depreciation expense was $100,000. Brik-o-Store had $2,000,000 in debt outstanding throughout all of 2015. This debt carried an average interest rate of 10 percent. Finally, Brik-o-Stores tax rate was 40 percent. Brik-o-Stores fiscal year runs from January 1 through December 31. Given this information, construct Brik-o-Stores 2015 multi-step income statement.
Income Statement Brick-o-Store For the Period Ending 12/31/2018 Sales - Cost of goods sold Gross profit - Operating expenses - Depreciation Operating income - Interest expense Profit before taxes - Taxes Net income
a.What is Brick stores Gross Profit? $800,000 $3,800,000 $6,800,000
b.What is Brick-o-Stores Gross Profit Margin? 13% 21% 48%
c.What is Brick-o-Stores Operating Income? $800,000 $400,000 $300,000
d.What is Brick-o-Stores Interest Expense? $400,000 $300,000 $200,000
e.What is Brick-o-Stores Tax Expense? $80,000 $40,000 $30,000
f.What is Brick-o-Stores Net Income? $60,000 $30,000 $8,000
g.What is Brick-o-Stores Net Profit Margin? 1.3% 1.6% 2.8%
Balance Sheet Brick-o-Store, Inc. As of 12/31/2018
Cash 230,000 Accounts receivable 380,000 Inventories 540,000 PP&E 4,350,000 Total Assets 5,500,000
Notes payable 340,000 Accounts payable 390,000 Current portion of L.T. Debt 90,000 Long term debt 2,100,000 Total Liabilities 2,920,000 Common stock ($1 par) 1,000,000 Retained earnings 1,580,000 Total Liabilities and Equity 5,500,000
h.What is Brick-o-Stores Current Assets? $610,000 $920,000 $1,150,000
i.What is Brick-o-Stores Current Liabilities? $220,000 $400,000 $820,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started