Reference no: EM133056004

Question - Wolfore department store is located in midtown metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company's fiscal year on November 30, 2017, these accounts appeared in adjusting trial balance. Accounts payable 39,128, Account receivable 25,112, Accumulated depreciation equipment 99,280, cash 11,680, common stock 51,100, cost of goods sold 896,878, freight out 9,052, equipment 229,220, depreciation expense 19,710,dividens 17,520, gain on disposal of plant assets 2,920, income tax expense 14,600, insurance expense 13,140, interest expense 7,300, inventory 38,252, notes payable 63,510, prepaid insurance 8,760, advertising expense 48,910, rent expense 49,640, retained earnings 20,732, salaries and wages expense 170,820, sales revenue 1,319,840, salaries and wages payable 8,760, sales return and allowance 29,200, utilities expense 15,476. additional data: Notes payable are due in 2021.

a) Prepare a multiple step income statement.

b) Prepare a retained earnings statement.

c) Prepare a classified balance sheet.

d) Calculate the profit margin and the gross profit rate.

The vice president of marketing and the director of human resources have developed a proposal whereby the company would compensate the sales force on a strictly commission bases. Given the increased incentive they expect net sales to increase by 15%. As a result they estimate that gross profit will increase by 59,047 and expenses by 85,556. Compute the expected new revised net income then compute the revised profit margin and revised gross profit rate.(ignore income tax effects).