Problem 5-04A Blossom Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company's fiscal year on November 30, 2022, these accounts appeared in its adjusted trial balance. Accounts Payable Accounts Receivable Accumulated Depreciation-Equipment Cash Common Stock Cost of Goods Sold Freight-Out Equipment Depreciation Expense Dividends Gain on Disposal of Plant Assets Income Tax Expense Insurance Expense Interest Expense Inventory Notes Payable Prepaid Insurance Advertising Expense Rent Expense Retained Earnings Salaries and Wages Expense Sales Revenue Salaries and Wages Payable Sales Returns and Allowances Utilities Expense $ 42,000 27,300 108,800 12,800 56,000 975,660 10,280 254,460 22,100 19,200 3,200 16,000 14,400 8,000 41,700 69,600 9,600 53,600 54,400 22,500 189,900 1,446,000 9,600 32,000 16,300 Additional data: Notes payable are due in 2026. BLOSSOM DEPARTMENT STORE Income Statement Prepare a retained earnings statement. (List items that increase retained earnings first.) BLOSSOM DEPARTMENT STORE Retained Earnings Statement $ SHOW LIST OF ACCOUNTS ES BLOSSOM DEPARTMENT STORE Balance Sheet Assets I. Liabilities and Stockholders' Equity $ udy SHOW LIST OF ACCOUNTS LINK TO TEXT Calculate the profit margin and the gross profit rate. (Round answers to 1 decimal place, e.g. 15.296) Profit margin % Gross profit rate % SHOW LIST OF ACCOUNTS LINK TO TEXT The vice president of marketing and the director of human resources have developed a proposal whereby the company would compensate the sales force on a strictly commission basis. Given the increased incentive, they expect net sales to increase by 15%. As a result, they estimate that gross profit will increase by $65,751 and expenses by $89,789. Compute the expected new net income. (Hint: You do not need to prepare an income statement.) Then, compute the revised profit margin and gross profit rate. Comment on the effect that this plan would have on net income and on the ratios, and evaluate the merit of this proposal. (Ignore income tax effects.) Revised net income $ % Revised profit margin (Round to 1 decimal place, e.g. 15.2%) % Revised gross profit rate (Round to 1 decimal place, e.g. 15.2%) Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Dalleveset benstander