The adjusted trial balance Checker Flag Auto, Inc., as of January 31, 2016, is presented next:

Requirements
1. Prepare the multi-step income statement for January for Checker Flag Auto, Inc.
2. Calculate the gross profit percentage for January for Checker Flag Auto, Inc.
3. What does Checker Flag Auto, Inc.'s gross profit percentage mean?

Transcribed Image Text:

Checker Flag Auto, Inc. Trial Balance January 31, 2016 ACCOUNT Cash DEBIT CREDIT $ 10,100 Accounts Receivable 3,400 46,300 2,600 81,000 Inventory Supplies Equipment Accumulated Depreciation, Equipment Accounts Payable $ 12,900 5,100 Unearned Sales Revenue 2,600 41,000 Note Payable, Long-term Common Stock 30,000 Retained Earnings Dividends 82,750 45,000 Sales Revenues 197,500 8,800 3,500 102,700 Sales Returns and Allowances Sales Discounts Cost of Goods Sold Selling Expense General Expense Interest Expense 43,600 24,300 550 $371,850 Total $371,850