Income Statement You have been given the following information for Ross's Rocket Corp.: net sales = $1,000,000;
Gross profit = $400,000;
Addition to retained earnings = $60,000;
Dividends paid to preferred and common stockholders = $90,000;
Depreciation expense = $50,000.
The firm's tax rate is 40 percent. What are the cost of goods sold and the interest expense for Ross's Rocket Corp.?
A) $100,000, and $600,000, respectively
B) $600,000, and $100,000, respectively
C) $600,000, and $200,000, respectively
D) $700,000, and $100,000, respectively

Question

Quizplus · Accepted Answer

To find the cost of goods sold, we can use the formula:
Net Sales - Gross Profit = Cost of Goods Sold
$1,000,000 - $400,000 = $600,000

To find the interest expense, we need more information as it is not given in the given information.

Income Statement You Have Been Given the Following Information for Ross's