The following is a listing of all of the income statement accounts for Mulberry
ID: 2564445 • Letter: T
Question
The following is a listing of all of the income statement accounts for Mulberry Street Sportswear as appear on the adjusted trial balance as of December 31 Advertising Expense Cost of Goods Sold Delivery Expense Insurance Expense Income Tax Expense Rent Expense Interest Expense Sales Revenue Sales Discounts Sales Returns and Allowances $10,400 88,200 4,800 1,100 6,520 10,700 1,800 160,900 9,100 18,500 Required: a. Prepare a multistep income statement. Mulberry Street Sportswear Income Statement For the year ended December 31 MacBo esc 20 808 FI F2 F3Explanation / Answer
Solution:
a) Multi Step Income Statement
Income Statement
For the year ended December 31
$$
Sales Revenue
$160,900
Less: Sales Discount
-$9,100
Less: Sales return and allowance
-$18,500
Net Sales Revenue
$133,300
Less: Cost of Goods Sold
$88,200
Gross Profit
$45,100
Operating Expenses:
Advertising Expense
$10,400
Delivery Expense
$4,800
Insurance Expense
$1,100
Rent Expense
$10,700
Total Operating Expense
$27,000
Operating Income
$18,100
Non-operating or other
Interest Expense
$1,800
Total Other Revenue or Expense
$1,800
Income before taxes
$16,300
Income tax expense
$6,520
Net Income
$9,780
b) Gross Profit Percentage = Gross Profit / Net Sales x 100 = 45,100 / 133,300 x 100 = 33.83%
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Income Statement
For the year ended December 31
$$
Sales Revenue
$160,900
Less: Sales Discount
-$9,100
Less: Sales return and allowance
-$18,500
Net Sales Revenue
$133,300
Less: Cost of Goods Sold
$88,200
Gross Profit
$45,100
Operating Expenses:
Advertising Expense
$10,400
Delivery Expense
$4,800
Insurance Expense
$1,100
Rent Expense
$10,700
Total Operating Expense
$27,000
Operating Income
$18,100
Non-operating or other
Interest Expense
$1,800
Total Other Revenue or Expense
$1,800
Income before taxes
$16,300
Income tax expense
$6,520
Net Income
$9,780
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.