Selected accounts and other information from the records of Calderone Company for the year ended December 31 follow:

Merchandise inventory, January 1	$	20,000
Merchandise inventory, December 31		22,000
Sales returns and allowances		1,000
Store supplies expense		3,000
Sales salaries expense		30,000
Sales		218,000
Purchases		50,000
Rent expense		37,000
Sales commissions expense		4,200
Freight in		1,500
Purchases discounts		400
Depreciation expenseOffice equipment		3,000
Depreciation expenseStore equipment		6,000
Utilities expense		8,000
Office salaries expense		25,000
Interest expense		400
Interest income		1,200

1. Compute the following items that would appear on a classified income statement. The company combines both selling and general and administrative expenses into a single line, Operating Expenses.

1. Net sales
2. Cost of goods sold
3. Gross profit
4. Operating expenses
5. Net income from operations
6. Other income, net
7. Net income for year

2. Prepare a summarized income statement for Calderone Company for the current year.

3. Compute the following ratios:

1. Gross profit percentage
2. Inventory turnover

• Req 1
• Req 2
• Req 3a
• Req 3b

Compute the following items that would appear on a classified income statement. The company combines both selling and general and administrative expenses into a single line, Operating Expenses.

a.	Net sales
b.	Cost of goods sold
c.	Gross profit
d.	Operating expenses
e.	Net Income from operations
f.	Other income, net
g.	Net income for year

CALDERONE COMPANY
Income Statement
Year Ended December 31, 20X1
Net salesselected answer correct
Cost of goods soldselected answer correct
Gross profitselected answer correct
Operating expensesselected answer correct
Net income for yearselected answer correct

Compute the ratio for gross profit percentage.

Gross Profit Percentage
Choose Numerator		Choose Denominator		Gross Profit Percentage
		Net salesselected answer correct
			=

Inventory Turnover
Choose Numerator		Choose Denominator		Inventory Turnover
Cost of goods soldselected answer correct		Average inventoryselected answer correct
			=