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OBJECTIVE 6 Exercise 1-46 Income Statement ERS Inc. maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2019. Required: 1. Prepare a single-step income statement for ERS for 2019. 2. CONCEPTUAL CONNECTION Compute net profit margin for ERS. If ERS is able to increase its service revenue by $100,000, what should be the effect on future income? 3. CONCEPTUAL CONNECTION Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS’ future profitability?

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

Solutions

Chapter
Section
Chapter 1, Problem 46E
Textbook Problem

OBJECTIVE 6 Exercise 1-46 Income Statement

ERS Inc. maintains and repairs office equipment. ERS had an average of 10,000 shares of common stock outstanding for the year. The following income statement account balances are available for ERS at the end of 2019.

Chapter 1, Problem 46E, OBJECTIVE 6 Exercise 1-46 Income Statement ERS Inc. maintains and repairs office equipment. ERS had

Required:

1. Prepare a single-step income statement for ERS for 2019.

2. CONCEPTUAL CONNECTION Compute net profit margin for ERS. If ERS is able to increase its service revenue by $100,000, what should be the effect on future income?

3. CONCEPTUAL CONNECTION Assume that ERS net profit margin was 8.5% for 2018. As an investor, what conclusions might you draw about ERS’ future profitability?

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Chapter 1 Solutions

Cornerstones of Financial Accounting
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