   Chapter 15.II, Problem 10RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Calculate the missing income statement items for Exercise 9, CVS Caremark; Exercise 10, AutoZone; and Exercise 11, PetSmart. Complete each company's column; then move on to the next column.THE INCOME STATEMENT Company Year Ended AutoZone December 31,2014 (in thousands) Revenue $9,475,313 Cost of Goods Sold ___________ Gross Margin 4,934,907 Operating Expenses 3,104,684 Income before Taxes ___________ Income Tax* ___________ Net Income (loss) 1,069,744 *Also includes interest expense and other income and losses. To determine To calculate: The cost of goods sold, income before taxes and income tax of AutoZone if gross margin is$4,934,907, revenue is $9,475,313, net income (loss) is$1,069,744 and operating expense is $3,104,684. Explanation Given Information: AutoZone’s gross margin is$4,934,907, revenue is $9,475,313, net income (loss) is$1,069,744 and operating expense is $3,104,684.  The Income Statement Company Year Ended AutoZone December 31,2014 (in thousands) Revenue$9,475,313 Cost of Goods Sold _________ Gross Margin $4,934,907 Operating Expenses$3,104,684 Income before Taxes _________ Income Tax ________ Net Income(loss) $1,069,744 Formula used: The gross margin is computed by subtracting cost of goods sold from total revenue. Gross margin=Total revenueCost of goods sold The equation can be reformed to compute the cost of goods sold Cost of goods sold=Total revenueGross margin The income before taxes is computed by subtracting total operating expense from gross margin. Income before taxes=Gross marginTotal operating expense The net income (loss) is computed by subtracting income tax from income before taxes Net income(loss)=Income before taxesIncome tax The equation can be reformed to compute income tax. Income tax=Income before taxesNet income(loss) Calculation: Consider AutoZone’s gross margin is$4,934,907, revenue is $9,475,313, net income (loss) is$1,069,744 and operating expense is \$3,104,684

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