   Chapter 15.II, Problem 11RE ### 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 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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