29.07.2022 - 23:43

# Stockholders of Poppa Rollo’s Pizza have prospered during the company’s second year of operation. In order to help with decisions about whether to open another pizzeria, Poppa Rollo’s Pizza has prepared the current income statement of the business. Jan Lo

Question:

Stockholders of Poppa Rollo’s Pizza have prospered during the company’s second year of operation. In order to help with decisions about whether to open another pizzeria, Poppa Rollo’s Pizza has prepared the current income statement of the business. Jan Lorange, the controller, read in an industry trade journal that a successful two year old pizzeria meets the following criteria:

a. Gross profit percentage is at least 60%.

b. Net income is at least $90,000. c. Are they meeting these criteria?  POPPA ROLLO’S PIZZA Income Statement Year Ended December 31, 2015 Sales Revenue$195,000 Gain on Sale of Land 24,600 Total Revenue 219,600 Cost of Goods Sold 85,200 Gross Profit 134,400 Operating Expenses: Salaries Expense 35,600 Interest Expense 6,000 Depreciation Expense 4,800 Utilities Expense 3,700 Total Operating Expense 50,100 Income from Operations 84,300 Other Revenue Sales Returns 10,700 Net Income $95,000 Answers (1) • April 12, 2023 в 07:17 Yes, Poppa Rollo's Pizza is meeting the criteria for a successful two year old pizzeria based on the income statement provided. a. The gross profit percentage is calculated by dividing the gross profit by the total revenue: Gross profit percentage = (Gross profit ? Total revenue) x 100 = ($134,400 ? $219,600) x 100 = 61.24% Therefore, the gross profit percentage is at least 60%, which meets the first criterion. b. The net income is$95,000, which is higher than the required minimum of \$90,000. Therefore, the second criterion is also met. Overall, Poppa Rollo's Pizza satisfies both criteria for a successful two year old pizzeria, which may indicate that it's a good decision to open another pizzeria.
Do you know the answer?
Not sure about the answer?
Find the right answer to the question Stockholders of Poppa Rollo’s Pizza have prospered during the company’s second year of operation. In order to help with decisions about whether to open another pizzeria, Poppa Rollo’s Pizza has prepared the current income statement of the business. Jan Lo by subject Accounting, and if there is no answer or no one has given the right answer, then use the search and try to find the answer among similar questions.
Authorization
*
*

Password generation