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Question - Review the following income statement for The Country Gentleman, a western clothing store. Then answer the following questions.
The Country Gentleman Income Statement For the Month Ended July 31, 2019
Revenues $17,440
Cost of goods sold (6,975)
Gross profit $10,465
Expenses Rent $1,650
Wages 1,360
Advertising 830
Total expenses (3,840)
Net income $6,625
Required -
a) What does gross profit represent?
b) Can you tell whether or not the expenses are reasonable compared to the amount of income?
c) Tyler Johnson, the owner of The Country Gentleman, is looking for a partner. As a potential investor, does this Income Statement present a favorable or unfavorable impression of the success of the business?
d) What other information would you require before you invested in this business?
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