Analyzing Gross Profit Percentage on the Basis of an Income Statement

The following summarized data were provided by the records of Slate, Incorporated, for the year ended December 31, 2012:

Required:
1. Based on these data, prepare an income statement (showing both gross profit and income from operations).
2. What was the amount of gross profit margin? What was the gross profit percentage ratio? Explain what these two amountsmean.

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$233,000 Sales of merchandise for cash Sales of merchandise on credit 40,000 Cost of goods sold Selling expense Administrative expense 146.000 47,200 20,000 Sales returns and allowances 8,000 Items not included in above amounts: Estimated bad debt loss, 3% of credit sales Average income tax rate, 30% Number of shares of common stock outstanding, 4,500