The following summarized data were provided by the records of Mystery Incorporated for the year ended December 31:

The following summarized data were provided by the records of Mystery Incorporated for the year ended December 31:

Office Expense	$	18,300
Cost of Goods Sold		158,000
Income Tax Expense		15,710
Sales Returns and Allowances		6,630
Salaries and Wages Expense		37,400
Sales of Merchandise on Cash		226,000
Sales of Merchandise for Credit		39,200

Required:
1.	Prepare a multistep income statement for internal reporting purposes.

Explanation:

1.

Sales Revenue = $226,000 + $39,200 = $265,200. Explanation: 2-a. Gross Profit = $258,570 – $158,000 = $100,570. 2-b. Gross Profit Percentage = $100,570 ÷ $258,570 × 100% = 38.89%. 3. Did the gross profit percentage in the current year improve or decline relative to the 37% gross profit percentage in the prior year? Improve Explanation: 3. The increase in gross profit percentage from 37% in the prior year to 39% in the current year is an improvement. The company is earning more gross profit on each dollar of sales.