Psymon Company, Inc., sells construction equipment. The annual fiscal period ends on December 31. The following adjusted trial balance was created from the general ledger accounts on December 31, 2013:

Required:
1. Prepare a multistep income statement that would be used for internal reporting purposes.
Treat Sales Discounts and Sales Returns and Allowances as contra-revenue accounts.
2. Prepare a multistep income statement that would be used for external reporting purposes, beginning with the amount for Net Sales.
3. Compute and interpret the gross profit percentage (using the formula shown in this chapter).

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Account Titles Cash Accounts Receivable Invento Debits $42,000 18,000 65,000 50,000 Credits and Equipment Accumulated D Liabilities Contributed Capital Retained Earnings, January 1, 2013 Sales Revenue Sales Returns and Allowances Sales Discounts Cost of Goods Sold Selling Expense Administrative Expense 21,000 30,000 90,000 11,600 182,000 ation 7,000 8,000 98,000 17,000 18,000 2,000 9,600 $334,600 ses Income Tax Expense Totals $334,600