Question

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 Advertising Expense $11,100 Cost of Goods Sold 88,000 Delivery Expense 4,300 Insurance Expense 1,100 Income Tax Expense 6,560 Rent Expense 12,000 Interest Expense 1,400 Sales Revenue 162,000 Sales Discounts 9,100 Sales Returns and Allowances 18,600 a. Prepare a multistep income statement.b. Compute the gross profit percentage.

Answer 1

Answer:

a. Multi Step income Statement is given below.

b. Gross Profit Percentage is 34.48 %.                          

Explanation:

a. Multi Step income statement separately shows operating and non-operating revenues and Expenses.

Advertising Expense = 11000

Cost of Goods Sold = 88000

Delivery Expense = 4300

Insurance Expense = 1100

Income Tax Expense = 6560

Rent Expense = 12000

Interest Expense = 1400

Sales Revenue = 162000

Sales Return & Allowance = 18600

Sales Discount = 9100

Computation

Sales Revenue                               162000

Sales Discount                               -9100

Sales return & allowance             -18600

Net Sales revenue                       134300

Cost of goods sold                        -8800

Gross Profit                                    46300

Operating Expenses

Selling Expenses

Advertising Expense                       -11000

Delivery Expense                               4300

Administrative Expenses

Rent Expense                                      -12000

Insurance Expense                              -1100

Operating income                                17900

Non Operating Revenues % Expense

Interest Expense                                   -1400  

Net Income before Tax                         16500

Income Tax Expense                             -6560

Net Income after Tax                               9940

b. Gross Profit Percentage = (Gross Profit / Net Sales ) x 100

Gross Profit %age = (46300/134300) x 100 = 34.48 %

 

         

       

Answer 2

a. The Gross Profit is = 46300

b. Then the Gross Profit Percentage is 34.48 %.

Computation of the Gross profit

a.) When Multi-Step income statement separately shows operating and also non-operating revenues and then Expenses.

Then Advertising Expense = 11000

Cost of Goods Sold = 88000

Delivery Expense is = 4300

Then Insurance Expense = 1100

Income Tax Expense = 6560

Rent Expense is = 12000

Then Interest Expense = 1400

Sales Revenue is = 162000

Sales Return & Allowance is = 18600

Sales Discount is = 9100

Computation

Sales Revenue 162000

Sales Discount -9100

Sales return & allowance -18600

Net Sales revenue 134300

Cost of goods sold -8800

Gross Profit 46300

Operating Expenses

Selling Expenses

Advertising Expense -11000

Delivery Expense 4300

Administrative Expenses

Rent Expense -12000

Insurance Expense -1100

Operating income 17900

Non-Operating Revenues % Expense

Interest Expense -1400

Net Income Before Tax 16500

Income Tax Expense -6560

Net Income After Tax 9940

b. When the Gross Profit Percentage is = (Gross Profit / Net Sales ) x 100

Gross Profit %age is = (46300/134300) x 100 = 34.48 %

Find more information about Gross profit here:

https://brainly.com/question/24442621