Flowers by Freddie presented for the income statement below for its most recent fiscal year. The items have been numbered for convenience in analysis.
1. Sales revenue $371,923
2. Cost of goods sold 201,668
3. Grossprofit $170,255
4. Operating expenses 72,853
5. Operating income $ 97,402
6. Other revenues 538
7. Other expenses (13,277)
8. Pre tax income $84,713
9. Income taxes 29,650
10. Net Income $55,063
Answer the following questions. Be specific. Give examples toclarify.
a. What is the difference between the revenue listed in item (1) and thatlisted in item (6)?
b. What does item(3) represent, and why is it important?
c. What do item (2),(4) and (7) have in common?
d. How are items (2),(4) and (7) different from another?
e. How is item(9) similar to items (2), (4) and(7)?
f. Why do you thinkitems (2), (4), (7) and (9) arelisted separately on an income statement rather than being lumpedtogether as one another?