189. Comparative income statements for Gregson Inc. are as follows: 2014 2013 Sales $2,000,000 $600,000 Cost of sales 800,000 400,000 Gross profit $1,200,000 $200,000 Operating expenses 520,000 120,000 Operating income $ 680,000 $ 80,000 Loss on sale of subsidiary (800,000) 0 Net income (loss) $ (120,000) $ 80,000 Required The president and management believe that the company performed better in 2014 than it did in 2013. Write the president's letter to be included in the 2014 annual report. Explain why the company is financially sound and why shareholders should not be alarmed by the $120,000 loss in a year when gross profit increased significantly. | |
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