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|
|Year Ended December 31, 2015|
|Gain on Sale of Land||24,600|
|Cost of Goods Sold||85,200|
|Total Operating Expense||50,100|
|Income from Operations||84,300|