Aeropostale, Inc., is a mall-based specialty retailer of casual apparel and accessories. The company concept is to provide the customer with a focused selection of high-quality, active-oriented fashions, at compelling values. The items, reported on its income statement for a recent year (ended March 31) are presented here (dollars in thousands), in alphabetical order:

Cost of goods sold $1,101,349

Interest expense 650

Net revenue 2,005,531

Other selling, general, and administrative expenses 386,883

Provision for income taxes 99,387

Weighted average shares outstanding 66,832

a. Prepare a multiple-step, consolidated income statement, with a presentation of basic earnings per share. (Enter your answers in thousands not in dollars. Round "Basic earnings per share" to 2 decimal places.)

b. What is the gross profit percentage? (Round your answer to 1 decimal place.)

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anthougo anthougo · Answer 1 · 2021-03-21T02:35:42+01:00

Answer:

Aeropostale, Inc.

Multi Step Income Statement for the year ended March 31:

Net revenue $2,005,531

Cost of goods sold $1,101,349

Gross profit $904,182

Other selling, general, and

administrative expenses 386,883

Operating income $517,299

Interest expense 650

Income before taxes $516,549

Provision: income taxes 99,387

Net income $417,262

Basic EPS = $6.24 per share

b. Gross profit percentage = $904,182/$2,005,531 * 100

= 45.1%

Explanation:

a) Data and Calculations:

Cost of goods sold $1,101,349

Interest expense 650

Net revenue 2,005,531

Other selling, general, and administrative expenses 386,883

Provision for income taxes 99,387

Weighted average shares outstanding 66,832

Basic EPS = $6.24 per share ($417,262/66,832)

Gross profit percentage = $904,182/$2,005,531 * 100

= 45.1%