Abraham & Straus inc.

(A New York Corporation)

PROFIT AND LOSS
YEAR ENDED JANUARY 31,   1936

Net sales   (including sales of leased  departments)...............                                   $20,962,265.86

Cost of goods sold,   selling,   operating and  administrative expenses,

exclusive of items listed below..............................                                      19,592,848.43

$   1,369,417.43

Other income:

Interest and dividends earned on securities, bank balances, etc.. .    $       35,013.71
Less net  deduction   from   the   sale,   and   the  adjustment  in   price,

of marketable securities.................................              2,281.82

-----------------------32,731.89

Balance,   before   depreciation,    interest   and    provision    for    federal

income tax..............................................                                   $   1,402,149.32

Deduct:

Depreciation     ............................................    $    401,766.77

interest  on  indebtedness and  amortization   of  debt   discount  and

expense    ..............................................         219,446.73

Provision for federal income tax............................            75,000.00

------------------------             696,213.50

Net profit..................................................                                   $      705,935.82
 

TOUCHE,  NIVEN  & CO,

PUBLIC   ACCOUNTANTS

EIGHTY MAIDEN  LANE
NEW YORK
 

March 26,   1936.
 

I a the Board of Directors of Ahrahaui & Stnnis, Inc.:

We have made an examination of the balance sheet of Abraham & Straus, Inc.. as at January 31, 1936, and of
the statements of profit and loss and surplus for the year then ended. In connection therewith, we examined or tested
accounting record.? of the Company and other supporting evidence and obtained information and explanations from
officers and employees of the Company; we also made a general review of the accounting methods and of the operating
and income accounts for the year, but we did not make a detailed audit of the transactions.

The expenditures for fixed assets in connection with the new building erected during the years ended January
31, 1 930 and January 31. I 93 1 were written down to replacement cost as of January 31, 1 933 and depreciation since
that date has been calculated upon the reduced values.

The bYj'A debentures due in 1943, of which $4,3 70,000.00 f.ice amount was outstanding at January 3i. 1935,
were called for redemption on October 1. 1935, At about the same time $3,000,000.00 face amount of A^/c notes due
in 1950 were sold and a bank loan of $1,000,000,00 was secured. The unamortized discount and expense of the old
issue and the premium paid upon its retirement, which together amounted to $177,967.26, were deducted from earned
surplus.    The expense incurred m connection with the new issue is being amortized over the trrm  thereof.

in our opinion, based upon such examination, the accompanying balance sheet and related statements of profit and
loss and surplus fairly present, in accordance with accepted principles of accounting consistently maintained by the
Company during the year under review, its position at January 31,   1936, and the results of its operations for the year.

Touche, Niven & Co.

Public Accountants.