Education Assignment for Aj


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E5.12 Prepare multi-step income statement and calculate profitability ratios.
In its income statement for the year ended December 31, 2025, Darren Company reported the following condensed data.
Salaries and wages expense $ 465,000
Cost of goods sold 987,000
Interest expense 71,000
Interest revenue 65,000
Depreciation expense 310,000
Loss on disposal of plant assets 83,500
Sales revenue 2,210,000
Income tax expense 25,000
Sales discounts 160,000
Utilities expense 110,000
a. Prepare a multiple-step income statement.
b. Calculate the profit margin and gross profit rate.
c. In 2024, Darren had a profit margin of 5%. Is the decline in 2025 a cause for concern? (Ignore income tax effects.)
NOTE: Enter a formula, a cell reference, or a value (if you are unable to reference a cell), into the yellow shaded input cells.
a. Darren Company
Income Statement
For the Year Ended December 31, 2025
Sales revenue
Less: Sales discounts
Net sales
Cost of goods sold
Gross profit
Operating expenses
Salaries and wages expense
Depreciation expense
Utilities expense
Total operating expenses
Income from operations
Other revenues and gains
Interest revenue
Other expenses and losses
Loss on disposal of plant assets
Interest expense
Income before income taxes
Income tax expense
Net income
Profit margin
b. Net income
Net sales
Profit margin
Gross profit rate
Gross profit
Net sales
Gross profit rate