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Problem 5-4A Wolford Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have

Problem 5-4A

Wolford 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 companys fiscal year on November 30, 2017, these accounts appeared in its adjusted trial balance.
Accounts Payable $ 34,840
Accounts Receivable 22,360
Accumulated DepreciationEquipment 88,400
Cash 10,400
Common Stock 45,500
Cost of Goods Sold 798,590
Freight-Out 8,060
Equipment 204,100
Depreciation Expense 17,550
Dividends 15,600
Gain on Disposal of Plant Assets 2,600
Income Tax Expense 13,000
Insurance Expense 11,700
Interest Expense 6,500
Inventory 34,060
Notes Payable 56,550
Prepaid Insurance 7,800
Advertising Expense 43,550
Rent Expense 44,200
Retained Earnings 18,460
Salaries and Wages Expense 152,100
Sales Revenue 1,175,200
Salaries and Wages Payable 7,800
Sales Returns and Allowances 26,000
Utilities Expense 13,780
Additional data: Notes payable are due in 2021.
Prepare a multiple-step income statement. (List other revenues before other expenses.)
WOLFORD DEPARTMENT STORE Income Statement choose the accounting period

For the Year Ended November 30, 2017November 30, 2017For the Month Ended November 30, 2017

Select an opening name for section one

DividendsNet Income / (Loss)Retained Earnings, December 1, 2011Retained Earnings, November 30, 2012SalesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome From OperationsOther Revenues and GainsOther Expenses and LossesIncome Before Income Taxes

Prepare a retained earnings statement. (List items that increase retained earnings first.)
WOLFORD DEPARTMENT STORE Retained Earnings Statement choose the accounting period

For the Month Ended November 30, 2017For the Year Ended November 30, 2017November 30, 2017

select an opening name

DividendsExpensesNet Income / (Loss)Retained Earnings, December 1, 2016Retained Earnings, November 30, 2017Sales RevenuesTotal ExpensesTotal RevenuesNet SalesGross ProfitOperating ExpensesTotal Operating ExpensesIncome From OperationsOther Revenues and GainsOther Expenses and LossesIncome Before Income Taxes

$enter a dollar amount
Prepare a classified balance sheet. (List current assets in order of liquidity.)
WOLFORD DEPARTMENT STORE Balance Sheet choose the accounting period

For the Year Ended November 30, 2017November 30, 2017For the Month Ended November 30, 2017

Assets

select an opening name for subsection one

Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity

Calculate the profit margin and the gross profit rate. (Round answers to 1 decimal place, e.g. 15.2%)
Profit margin enter Profit margin in percentages rounded to 1 decimal place %
Gross profit rate enter Gross profit rate in percentages rounded to 1 decimal place %
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 $52,576 and expenses by $76,180. Compute the expected new net income. Then, compute the revised profit margin and gross profit rate. (Ignore income tax effects.)
Revised net income $enter revised net income in dollars
Revised profit margin (Round to 1 decimal place, e.g. 15.2%) enter Revised profit margin in percentages rounded to 1 decimal place %
Revised gross profit rate (Round to 1 decimal place, e.g. 15.2%) enter Revised gross profit rate in percentages rounded to 1 decimal place %

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