Education Assignment for Aj

E5.12

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
Instructions
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
c.