The following summarized data were provided by the records of Mystery Incorporated for the year ended December 31, 2013:
Administrative Expense............................... $ 19,000
Cost of Goods Sold.................................... 165,000
Income Tax Expense.................................... 17,600
Sales Returns and Allowances........................... 7,000
Selling Expense.......................................... 40,200
Sales of merchandise on cash.......................... 240,000
Sales of merchandise for credit......................... 42,000
Required:
1. Based on these data, prepare a multistep income statement for internal reporting purposes
(showing all appropriate subtotals and totals).
2. What was the amount of gross profit? What was the gross profit percentage (calculated using the formula shown in this chapter)? Explain what these two amounts mean.
3. Evaluate the 2013 results in light of the company's 38% gross profit percentage in 2012.