Big Tommy Corporation is a local grocery store organized seven years ago as a corporation. The bookkeeper prepared the following statement at year-end (assume that all amounts are correct, but note the incorrect format):

BIG TOMMY CORPORATION
Profit and Loss December 31
	Debit	Credit
Net Sales		$404,000
Cost of Goods Sold	$279,000
Salaries and Wages Expense	58,000
Office Expenses	16,000
Travel Expenses	1,000
Income Tax Expense	15,000
Net Profit	35,000
Totals	$404,000	$404,000

Required:

1. Prepare a properly formatted multistep income statement that would be used for external reporting purposes.

2. Compute and interpret the gross profit percentage (using the formula shown in this chapter and rounding to one decimal place).