The records of Hill Tower Steak Company list the following

Price: $3.99


P5-41B Preparing a multi-step income statement and calculating gross profit
percentage [15–25 min]

The records of Hill Tower Steak Company list the following selected accounts for the
quarter ended September 30, 2012

Interest revenue $400 Accounts payable $16,500
Inventory 45,700 Accounts receivable 33,900
Note payable, long–term 42,000 Accumulated depreciation 37,500
Salary payable 3,400 Holstein, capital, Jun 30 52,900
Sales discounts 2,200 Holstein, drawing 18,500
Sales returns and allowances 8,400 Cash 8,100
Sales revenue 296,700 Cost of goods sold 162,400
Selling expense 37,500 Equipment 125,000
Supplies 6,000 General expenses 16,100
Unearned sales revenue 13,200 Interest payable 1,200

Requirements
1. Prepare a multi-step income statement.
2. M. Davidson, manager of the company, strives to earn gross profit percentage of
at least 50% and net income percentage of 20%. Did Hill Tower achieve these
goals? Show your calculations