The following information describes a series of sales-side transactions involving Groth Company, a wholesale firm that sells sporting goods to retail companies. October 1st Groth sells lacrosse sticks for $25,000 on account with terms 5/10, n/30. October 4th The Oct. 1st retailer returns $5,000 of lacrosse sticks to Groth. October 6th Groth sells elbow pads for $20,000 on account with terms 4/10, n/30. October 7th The Oct. 6th retailer notifies Groth that Groth sold them shoulder pads instead of elbow pads. Groth offers to reduce the purchase price to $12,000 if the retailer keeps the shoulder pads and the retailer agrees to do this. October 8th The Oct. 1st retailer pays the balance due (per credit terms) to Groth. October 18th The Oct. 6th retailer pays the balance due (per credit terms) to Groth. At the end of October, Groth notes the following expense balances from their adjusted trial balance: Cost of Goods Sold: $20,150 Depreciation Expense: $3,000 Income Tax Expense: $310 Interest Expense: $1,300 Selling, General & Administrative Expense: $5,000 . Directions: 1. Prepare a multiple-step income statement in good form for Groth Company for the month ending October 31st, 2019. 2. Calculate Groths gross margin (i.e., gross profit rate) and profit margin using information reported on their October 2019 multiple-step income statement. 3. Jason Groth, the founder of Groth Company, goes on Shark Tank and offers the Sharks a 10% equity stake in his company in exchange for $100,000 cash. Groth says during his pitch to the Sharks that "Groth's merchandising performance improved over the past year, as indicated by a year-over-year increase in Groth's profit margin." a. If you were one of the Sharks listening to this pitch, how might you respond to Groth's claim about his company's merchandising performance? b. Later in his pitch, suppose Groth says that, at the end of last October (2018), the company's gross margin was 45% and its profit margin was 3%. Do these numbers support or weaken Groths claim about his company's merchandising performance? The following information describes a series of sales-side transactions involving Groth Company, a wholesale firm that sells sporting goods to retail companies. October 1st Groth sells lacrosse sticks for $25,000 on account with terms 5/10, n/30. October 4th The Oct. 1st retailer returns $5,000 of lacrosse sticks to Groth. October 6th Groth sells elbow pads for $20,000 on account with terms 4/10, n/30. October 7th The Oct. 6th retailer notifies Groth that Groth sold them shoulder pads instead of elbow pads. Groth offers to reduce the purchase price to $12,000 if the retailer keeps the shoulder pads and the retailer agrees to do this. October 8th The Oct. 1st retailer pays the balance due (per credit terms) to Groth. October 18th The Oct. 6th retailer pays the balance due (per credit terms) to Groth. At the end of October, Groth notes the following expense balances from their adjusted trial balance: Cost of Goods Sold: $20,150 Depreciation Expense: $3,000 Income Tax Expense: $310 Interest Expense: $1,300 Selling, General & Administrative Expense: $5,000 . Directions: 1. Prepare a multiple-step income statement in good form for Groth Company for the month ending October 31st, 2019. 2. Calculate Groths gross margin (i.e., gross profit rate) and profit margin using information reported on their October 2019 multiple-step income statement. 3. Jason Groth, the founder of Groth Company, goes on Shark Tank and offers the Sharks a 10% equity stake in his company in exchange for $100,000 cash. Groth says during his pitch to the Sharks that "Groth's merchandising performance improved over the past year, as indicated by a year-over-year increase in Groth's profit margin." a. If you were one of the Sharks listening to this pitch, how might you respond to Groth's claim about his company's merchandising performance? b. Later in his pitch, suppose Groth says that, at the end of last October (2018), the company's gross margin was 45% and its profit margin was 3%. Do these numbers support or weaken Groths claim about his company's merchandising performance