poed owis information for Blues Gutr Sales Company for he e ending December 31,

Question

poed owis information for Blues Gutr Sales Company for he e ending December 31, s Guitar Sales Company for the year ending December 31, 2017. Advertising Expense Freight-out Cost of goods sold Insurance Expense $ 12,000 36,000 5,000 425,000 S 8,500 Rent Expense 7,500 254,000 4,800 Salaries and Wages Expense Sales returns and allowances Sales revenue Instructions: 1. Prepare a multiple step income statement in "good form" for Blues Guitar Sales Company. 2. Compute the Gross Profit Percentage for Blues Guitar Sales.

Explanation / Answer

Prepare multistep income statement :

2) Gross profit percentage = 166000*100/420000 = 39.5%

Sales revenue 425000 Less: Sales return and allowances -5000 Net Sales 420000 Less: Cost of goods sold -254000 Gross profit 166000 Less: Operating expense Advertising expense -8500 Freight out -7500 Insurance expense -4800 Salary and wages expense -36000 Rent expense -12000 Total operating expense -68800 Net income 97200

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