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Problem 6-204 [LO 6-6] The following is a listing of all of the income statement accounts...

Problem 6-204 [LO 6-6]

The following is a listing of all of the income statement accounts for Mulberry Street Sportswear as they appear on the adjusted trial balance as of December 31.

Advertising Expense $10,900
Cost of Goods Sold 87,600
Delivery Expense 5,800
Insurance Expense 1,100
Income Tax Expense 6,240
Rent Expense 10,600
Interest Expense 1,400
Sales Revenue 160,900
Sales Discounts 9,700
Sales Returns & Allowances 18,200

Required:

Prepare a multistep income statement.

Compute the gross profit percentage.

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Answer #1

Multistep income statement :

Revenue
Sales revenue 160900
Less:Sales Discounts 9700
Less: Sales Returns & Allowances 18200 27900
Net Sales 133000
Less: Cost of goods sold 87600
Gross profit 45400
Less: Operating expense
Advertising Expense 10900
Delivery expense 5800
Insurance expense 1100
Rent expense 10600
Total operating expense 28400
Operating income 17000
Other revenue and expense
Interest expense 1400
Income before tax 15600
Less: Income tax expense 6240
Net income 9360

Gross profit percentage = 45400*100/133000 = 34.14%

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