. Single-step income statement - groups all revenues together and all expenses together without calculating other subtotals . Multi-step income statement- lists several important subtotals including gross profit, operating income, and income before income tax expense . A merchandiser's statement of retained earnings looks exactly like that of a service business. . The balance sheet will also look the same, except merchandisers have additional current asset accounts, such as Merchandise Inventory and Estimated Returns Inventory. In addition, a merchandiser's balance sheet also includes the current liability Refunds Payable. 6. How do we use the gross profit percentage to evaluate business performance? . The gross profit percentage measures the profitability of each sales dollar above the cost of goods sold. . Gross profit percentage - Gross profit/ Net sales revenue