Part A. The following information is available for the Entity A: Sales revenue $618,000 Sales returns and allowances 15,000 Sales discounts 5,000 Cost of goods sold 398,000 Operating expenses 114,000 Interest expense 15,000 Loss on sale of equipment 4,000 Interest revenue 20,000 Instructions 1. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2020. The income tax rate is 30%. Check figures: Income from operations is $86,000. Net income is $60,900. 2. Compute the profit margin and the gross profit rate. Show and label calculations. 3. Suggest at least three ways these measures might be improved and net income increased.

Part B: Entity B sold Entity C $9,000 of merchandise, terms 2/10, net 30. Entity B paid $4,500 for the merchandise. Instructions 1. Journalize the sale on Entity B's books. 2. If Entity C returned $2,000 of the merchandise purchased, and paid for the remainder in 8 days from the date of the sales invoice, how much did Entity C remit to Entity B? You must show any calculations.