MGMT FFAC Ch 5: Exercises; and Review Over Entries There is a Part A and Part B to this CE - do them both as you won't be able to resubmit later! Part A. The following information is available for Entity A: Instructions 1. Use the above information to prepare a multiple-step income statement for the year ended December 31,2024. Please look at Illus. 5.12 in the text for an example. The income tax rate is 23% (round to the nearest dollar). Check figures: Income from operations is $159,880. Net income is $124,494. 2. Compute the profit margin and the gross profit rate. Show and label calculations. 3. Suggest at least three ways these measures might be materially improved and net income increased. Be sure to consider the relationship between net sales, cost-ofgoods-sold and gross profit as well as operating expenses. Part B: Entity B had the following transactions/events. Assume a perpetual inventory system. Make the following entries below. 1. Entity B sold Entity C $45,000 of merchandise, terms 3/10, net 30 . The merchandise cost Entity B $30,000 2. Entity B paid its monthly rent of $1,500. 3. At the end of last month, Entity B purchased $600 of supplies on credit and made the proper journal entry. It will now pay for those supplies. 4. A count of the supplies indicates that only $200 are left. (Make the appropriate adjusting entry). 5. Entity C (see item 1) paid Entity B for the merchandise it bought and did so 9 days after the invoice date