Preparing a single-step income statement, preparing a multi-step
income statement, and computing the gross profit percentage
The records of Grade A Steak Company list the following selected accounts for the
quarter ended April 30, 2015:
Learning Objectives 5, 6
2. Operating Income $71,900
Interest Revenue $ 800 Accounts Payable $ 17,000
Merchandise Inventory 45,100 Accounts Receivable 33,500
Notes Payable, long-term 47,000 Accumulated Depreciation—Equipment 37,600
Salaries Payable 2,400 Angus, Capital, Jan. 31 53,300
Sales Discounts 2,000 Angus, Withdrawals 20,000
Sales Returns and Allowances 7,500 Cash 7,600
Sales Revenue 296,100 Cost of Goods Sold 162,100
Rent Expense (Selling) 21,780 Equipment 130,600
Office Supplies 5,700 Interest Payable 1,200
Unearned Revenue 13,300 Rent Expense (Administrative) 9,780
Interest Expense 2,000 Utilities Expense (Selling) 10,890
Depreciation Expense—Equipment (Administrative) 1,630 Delivery Expense (Selling) 3,630
Utilities Expense (Administrative) 4,890
Requirements
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Prepare a single-step income statement
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Prepare a multi-step income statement
3. M. Davidson, manager of the company, strives to earn a gross profit percentage
of at least 50%. Did Grade A achieve this goal? Show your calculations.
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