Preparing a multi step income statement and calculating gross profit percentage The records of Hill Tower Steak Company list the following selected accounts for the quarter ended September 30, 2012:
|
Interest revenue |
$ 400 |
Accounts payable |
$ 16,500 |
|
Inventory |
45,700 |
Accounts receivable |
33,900 |
|
Note payable, long–term |
42,000 |
Accumulated depreciation |
37,500 |
|
Salary payable |
3,400 |
Retained earnings, Jun 30 |
38,900 |
|
Sales discounts |
2,200 |
Dividends |
18,500 |
|
Sales returns and allowances |
8,400 |
Cash |
8,100 |
|
Sales revenue |
296,700 |
Cost of goods sold |
162,400 |
|
Selling expense |
37,500 |
Equipment |
125,000 |
|
Supplies |
6,000 |
General expenses |
16,100 |
|
Unearned sales revenue |
13,200 |
Common stock |
14,000 |
|
Interest payable |
1,200 |
|
|
Requirements
1. Prepare a multi step income statement.
2. M. Davidson, manager of the company, strives to earn gross profit percentage of at least 50% and net income percentage of 20%. Did Hill Tower achieve these goals? Show your calculations.