The following summarized data were provided by the records of Slate Inc. for the year ended December 31, 2011:

Required:
1. Based on these data, prepare a multiple-step income statement (showing both gross profit and income from operations).
2. What was the amount of gross profit? What was the gross profit percentage? Explain what these two numbers mean.

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Sales of merchandise for cash Sales of merchandise on credit Cost of sales Selling expenses Administrat've expenses. Sales returns and allowances Items not included in the above amounts: Estimated bad debt, 2.5% of credit sales Average income tax rate, 30% Number of common shares outstanding, 5,000 $220,000 32,000 147,000 40,200 19,000 7,000