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PA6-4 Preparing a Multistep Income Statement with Sales Discounts and Sales Returns and Allowances and...

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PA6-4 Preparing a Multistep Income Statement with Sales Discounts and Sales Returns and Allowances and Computing the Gross Profit Percentage [LO 6-5] The following information applies to the questions displayed below. Big Tommy Corporation is a local grocery store organized seven years ago as a corporation. The bookkeeper prepared the following statement (assume that all amounts are correct, but note the incorrect terminology and format): BIG TOMMY CORPORATION Profit and Loss December 31 Credit $420,000 Debit Sales Cost of Goods Sold Sales Returns and Allowances Sales Discounts Salaries and Wages Expense Office Expense Travel Expenses Income Tax Expense Net Profit $279,000 10,000 6,000 58,000 16,000 1,000 15,000 35,000 Totals $420,000 $420,000

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