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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

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 PetSmart February 3, 2013 (in thousands)
Revenue ______________
Cost of Goods Sold 4,696.098
Gross Margin 2,062,139
Operating Expenses ______________
Income before Taxes 651,217
Income Tax* ______________
Net Income (loss) 389,529

*Also includes interest expense and other income and losses.

To determine

To calculate: The revenue, operating expense and income tax of Pet Smart if gross margin is $2,062,139, cost of goods sold is $4,696,098, net income (loss) is $389,529 and income before taxes is $651,217.

Explanation

Given Information:

Pet Smart’s gross margin is $2,062,139, cost of goods sold is $4,696,098, net income (loss) is $389,529 and income before taxes is $651,217.

The Income Statement
Company Year Ended PetSmart February 3,2013 (in thousands)
Revenue _______
Cost of Goods Sold $4,696,098
Gross Margin $2,062,139
Operating Expenses ________
Income before Taxes $651,217
Income Tax ________
Net Income(loss) $389,529

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 total revenue

Total revenue=Cost of goods sold+Gross margin

The income before taxes is computed by subtracting total operating expense from gross margin.

Income before taxes=Gross marginTotal operating expense

The equation can be reformed to compute the operating expense.

Total operating expense=Gross marginIncome before taxes

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 Pet Smart’s gross margin is $2,062,139, cost of goods sold is $4,696,098, net income (loss) is $389,529 and income before taxes is $651,217

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