Income Statement Classifications Simon Hardware and Garfunkel Foods Are Sole Proprietorships with Similar

question 95

Essay

Income statement classifications
Simon Hardware and Garfunkel Foods are sole proprietorships with similar amounts of total assets.Also,both businesses earn similar amounts of revenue,incur similar amounts of operating expenses,and report similar net incomes.However,Simon has a higher cost of goods sold,while Garfunkel Foods has higher interest expense.
Indicate which of these companies has the higher (a)gross profit rate,and (b)return on assets.In each case,explain the reasons for each answer.

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Definitions:

Observer Effect

The tendency of people or animals to behave differently from normal when they know they are being observed.

Behaviorists

Psychologists who focus on observable behaviors and the ways in which learning and environment influence them, often disregarding mental states.

Third Force

A term referring to the humanistic-existential perspective in psychology that emerged as a reaction against the limitations of Freudian psychoanalysis and behaviorism.

Personality Theory

A theory that attempts to explain the patterns of thoughts, feelings, and behavior that make a person unique.