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Business, 24.05.2020 00:58 emmacox069

Psymon Company, Inc., sells construction equipment. The annual fiscal period ends on December 31. The following adjusted trial balance was created from the general ledger accounts on December 31:

Account Titles Debits Credits
Cash $54,560
Accounts Receivable 22,800
Inventory 83,000
Property and Equipment 62,000
Accumulated Depreciation $26,000
Accounts Payable 38,400
Common Stock 114,000
Retained Earnings, January 1 14,000
Sales Revenue 217,400
Cost of Goods Sold 126,800
Salaries and Wages Expense 21,800
Office Expenses 22,800
Interest Expense 3,200
Income Tax Expense 12,840
Totals $409,800 $409,800

Required:
(a) Prepare a multistep income statement that would be used for internal reporting purposes. Treat Sales Discounts and Sales Returns and Allowances as contra-revenue accounts. TIP: Some of the accounts listed will appear on the balance sheet rather than the income statement.
(b) Prepare a multistep income statement that would be used for external reporting purposes, beginning with the amount for Net Sales.
(c) Compute the gross profit percentage.

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