The following summarized data were provided by the records of Slate, Incorporated, for the year ended December 3 1 , 2004:

Required: 1. Based on these data, prepare a multiple-step income statement (showing both gross profit and income from operations). Include a Percentage Analysis column. 2. What was the amount of gross profit margin? What was the gross profit percentage ratio? Explain what these two amounts mean.

LO1

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Sales of merchandise for cash Sales of merchandise on credit Cost of goods sold Selling expense Administrative expense Sales returns and allowances Items not included in above amounts: Estimated bad debt loss, 2.5% of credit sales Average income tax rate. 30% Number of shares of common stock outstanding. 5.000 $220,000 32,000 147,000 40,200 19.000 7,000