Question

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The following summarized data were provided by the records of Mystery Incorporated for the year ended December 31:
Office Expense $ 19,200
Cost of Goods Sold 167,000
Income Tax Expense 18,350
Sales Returns and Allowances 7,170
Salaries and Wages Expense 41,000
Sales of Merchandise on Cash 244,000
Sales of Merchandise for Credit 42,800
Required:
1. Prepare a multistep income statement.
2. What was the amount of gross profit?
3. What was the gross profit percentage? (Round your answer to 1 decimal place.)

Answer 1

Step-by-step explanation:

1. The preparation of multistep income statement is given below :-

Net sales revenue $279,630

Less: Cost of goods sold $167,000

Gross profit $112,630

Less: Operating expenses :

Salaries and Wages Expense $41,000

Office Expense $19,200

Profit before tax $52,430

Less: income tax expense -$18,350

Net income $34,080

The computation of net sales revenue is given below:-

= 244,000 + 42,800 - 7,170

= 279,630

2. The Gross profit is computed above that is $112,630

3. The Gross profit percentage is calculated below

= Gross Profit ÷ Net Sales × 100

= $112,630 ÷ $279,630 × 100

= 40.3%