E6-21 Analyzing Gross Profit Percentage on the Basis of a Multistep Income State

ID: 2397942 • Letter: E

Question

E6-21 Analyzing Gross Profit Percentage on the Basis of a Multistep Income Statemen The following information applies to the questions displayed below. The following summarized data were provided by the records of Mystery Incorporated for the year ended December 31 Office Expense Cost of Goods Sold Income Tax Expense Sales Returns and Allowances Salaries and Wages Expense Sales of Merchandise on Cash Sales of Merchandise for Credit $ 19,200 167,000 18,350 7,170 41,000 244,000 42,800 References Section Break E6-21 Analyzing Gross Profit Percentage on the Basis of a Multistep Income Statement [LO 6-5 value: 1.00 points E6-21 Part 1 Required: 1. Prepare a multistep income statement

Explanation / Answer

Mystery Incorporated

Income statement

For year ended December 31

Revenues

Sales revenue ($244,000+$42,800)

$ 286,800.00

Less: Sales returns and allowances

$ 7,170.00

Net sales

$ 279,630.00

Cost of goods sold

$ 167,000.00

Gross profit

$ 112,630.00

Operating expenses

Office expenses

$ 19,200.00

Salaries and wages expense

$ 41,000.00

Total operating expenses

$ 60,200.00

Income from operations

$ 52,430.00

Income tax expenses

$ 18,350.00

Net income

$ 34,080.00