9. The following summarized data were provided by the records of Pacific Corporation for

The following summarized data were provided by the records of Pacific Corporation for the year

the year ended December 31:

Cost of Goods Sold $230,000 Income Tax Expense 26,600 Merchandise Sales (gross revenue) for Cash 350,000

Merchandise Sales (gross revenue) on Credit 40,000

Administrative Expenses 23,800 Sales Returns and Allowances 10,500 Salaries and Wages Expense 49,700

Required:

1. Based on these data, prepare a multistep income statement for external reporting purposes ( showing all appropriate subtotals and totals)

2. What was the amount of gross profit? What was the gross profit percentage (calculated using the formula shown in this chapter)? Explain what these two amounts mean.

3. Evaluate the current year results in light of the companys 38% gross profit percentage in the prior year.