Question

1 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. 8 00:43:02 Skipped Advertising Expense Cost of Goods Sold Delivery Expense Insurance Expense Income Tax Expense Rent Expense Interest Expense Sales Revenue Sales Discounts Sales Returns & Allowances $10,400 88,800 5, 200 600 6,040 10,400 1,400 160,900 10,500 18,500 Required: a. Prepare a multistep income statement. b. Compute the gross profit percentage. Complete this question by entering your answers in the tabs below. Required Required A B Prepare a multistep income statement. Mulberry Street Sportswear Income Statement Required Required B

Answer 1

Mulberry Streat Sportswear
Income Statement
Sales Revenue	160,900
Less: Sales discounts	10,500
Less: Sales returns & allowances	18,500
Net sales		131,900
Less: Cost of goods sold		88,800
Gross profit		43,100
Operating Expenses
Selling Expenses
Advertising Expenses	10,400
Delivery Expenses	5,200	15,600
Administrative Expenses
Insurance Expenses	600
Rent Expenses	10,400	11,000
Income from operations		16,500
Other revenue & expenses
Interest Expenses		1,400
Income Before Taxes		15,100
Less: Income Tax Expenses		6,040
Net income		9,060
Gross Profit Percentage
Gross Profit Percentage = [Gross Profit / Net Sales] x 100
Gross Profit Percentage = [$43,100 / $131,900] x 100
Gross Profit Percentage = 32.7%