Hi could you please complete both questions? n 2017, Randa Merchandising, Inc.,

Question

Hi could you please complete both questions?

n 2017, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. A listing of the major sections of an income statement follows: Item Debit Credit 1. Net sales 2. Gain on state's condemnation of company property, net of tax 3. Cost of goods sold 4. Income taxes expense 5. Depreciation expense 6. Gain on sale of wholesale business segment, net of tax 7. Loss from operating wholesale business segment, net of tax 8.Loss of assets from meteor strike, net of tax $2,980,000 245,000 $1,520,828 211,000 242,500 770,000 463,000 646,000 Prepare the income statement for calendar year 2017. (Loss amounts should be indicated with a minus sign.)

Explanation / Answer

1) RANDA MERCHANDISING, INC.

Income statement for the year ended December 31, 2017 (Amount in $)

2)a) Computation of ratios using the information reported in yen

Current Ratio = Current Assets/Current Liabilities = 1,432,250/209,450 = 6.84 to 1

Net Profit Margin = Net Income/Net Sales = 9,388/637,110 = 1.47%

Sales to Assets = Net Sales/Total Assets = 637,110/1,528,936 = 0.42

2b) Computation of ratios using the information reported in dollars

Current Ratio = Current Assets/Current Liabilities = $15,239,140/$2,228,548 = 6.84 to 1

Net Profit Margin = Net Income/Net Sales = $99,888/$6,778,850 = 1.47%

Sales to Assets = Net Sales/Total Assets = $6,778,850/$16,267,879 = 0.42

Net Sales (A) 2,980,000 Expenses: Cost of goods sold 1,520,828 Depreciation Expenses 242,500 Tax expenses 211,000 Total Operating expenses (B) 1,974,328 Net Profit before extraordinary gains or losses (A-B) 1,005,672 Other unusual and/or infrequent gains(losses): Gain on state's condemnation of company property, net of tax 245,000 Loss of assets from meteor strike, net of tax (646,000) Profit from continuing operations 604,672 Discontinued Segment Gain on sale of wholesale business segment, net of tax 770,000 Loss from operating wholesale business segment, net of tax (463,000) Net gain from sale of wholesale business segment, net of tax 307,000 307,000 Total Profit from continuing and discontinued operations 911,672

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