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

Required:
1. Based on these data, prepare a multistep income statement for internal reporting purposes (showing all appropriate subtotals and totals).
2. What was the amount of gross profit? What was the gross profit percentage (calculated using the formula shown in this chapter and rounded to one decimal place)? Explain what these two amounts mean.
3. Did the gross profit percentage in the current year improve, or decline, relative to the 38.0% gross profit percentage in the prior year?

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Office Expense Cost of Goods Sold Income Tax Expense Sales Returns and Allowances Salaries and Wages Expense Sales of merchandise on cash Sales of merchandise for credit $19.000 165,000 17.600 7.000 40.200 240.000 42,000