Reference no: EM132844519
Question - The adjusted trial balance of John Corporation included the following selected accounts:
Debit Credit
Sales $575,000
Sales returns and allowances $55,000
Sales discounts 10,500
Cost of goods sold 347,000
Freight out 2,000
Advertising expense 15,000
Interest expense 19,000
Store salaries expense 45,000
Utilities expense 18,000
Amortization expense 3,296
Income tax expense 32,000
Interest revenue 15,000
Required -
1. Use the above information to conduct a multiple-step statement of earnings for the year ended December 31, 2020.
2. Calculate the net profit margin (percentage) and gross profit margin (percentage). Briefly explain the meaning of these two measures.