Using the Adjusted Trial Balance for merchandising company, perform the following tasks:

1. Prepare an Income Statement in multiple-step format with subtotals for net sales, gross profit, income before taxes, and net income. (20 points)

2. Calculate Gross Profit Margin. (5 points)

Tower Corporation Adjusted Trial Balance

at 31 December 2019

Debit Credit

Cash 7,590

Accounts Receivable 5,910

Merchandise Inventory 4,870

Prepaid Insurance 2,550

Equipment 25,230

Accumulated Depreciation: Equipment 450

Accounts Payable 4,230

Capital Stock 24,690

Retained Earnings, January 1, 2019 5,550

Dividends 1,150

Sales revenue 48,150

Sales returns 740

Cost of Goods Sold 17,000

Salaries Expense 8,850

Utilities Expense 2,130

Rent Expense 3,390

Depreciation Expense 450

Interest Expense 230

Income Tax Expense 2,980 ______

83,070 83,070