PA6-4 Preparing a Multistep Income Statement with Sales Discounts and Sales Returns and Allowances and Computing the Gross Profit Percentage [LO 6-7]

Big Tommy Corporation is a local grocery store organized seven years ago as a corporation. The store is in an excellent location, and sales have increased each year. At the end of 2013, the bookkeeper prepared the following statement (assume that all amounts are correct, but note the incorrect terminology and format):

BIG TOMMY CORPORATION Profit and Loss December 31, 2013
	Debit		Credit
Sales			$	290,000
Cost of Goods Sold	$	215,000
Sales Returns and Allowances		4,400
Sales Discounts		4,400
Selling Expense		42,000
Administrative Expense		4,000
General Expenses		1,000
Income Tax Expense		5,760
Net Profit		13,440
Totals	$	290,000	$	290,000

prev Question #5 (of 5 next 2. Prepare a properly formatted mu step income statement that would be used for external reporting purposes, beginning with the amount for Net Sales BIG TOMMY CORPORATION Income Statement For the Year Ended December 31, 2013 3. Compute the gross profit percentage. (Round your answer to 1 decimal place. Gross Profit Percentage save & exit submit assignment