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Compute the gross profit rate

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Problem - In 2012, James Ford Company had net sales of $900,000 and cost of goods sold of $522,000. Operating expenses were $225,000, and interest expense was $11,000. Ford prepares a multiple-step income statement.

Required -

(a) Compute Ford's gross profit.

(b) Compute the gross profit rate. Why is this rate computed by financial statement users?

(c) What is Ford's income from operations and net income?

(d) If Ford prepared a single-step income statement, what amount would it report for net income?

(e) In what section of its classified balance sheet should Ford report merchandise inventory?

Reference no: EM132801575

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