[The following information applies to the questions displayed below.] Baskin-Rob

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[The following information applies to the questions displayed below.] Baskin-Robbins is one of the world’s largest specialty ice cream shops. The company offers dozens of different flavors, from Very Berry Strawberry to lowfat Espresso ’n Cream. Assume that a local Baskin-Robbins in Raleigh, North Carolina, has the following amounts for the month of July 2018. Salaries expense $12,200 Sales revenue $62,300 Inventory (July 1, 2018) 1,550 Interest income 1,800 Sales returns 1,200 Cost of goods sold 27,950 Utilities expense 2,850 Rent expense 5,200 Income tax expense 4,500 Interest expense 500 Inventory (July 31, 2018) 1,200

1. Prepare a multiple-step income statement for the month ended July 31, 2018.

Explanation / Answer

1. Prepare a multiple-step income statement for the month ended July 31, 2018.

Sales revenue 62300 Less: Sales return (1200) Net sales 61100 Less: Cost of goods sold (27950) Gross profit 33150 Less: Operating expense Salaries expense (12200) Utilities expense (2850) Rent expense (5200) Total expense (20250) Income from operation 12900 Other revenue and gains Interest income 1800 Other expenses and losses Interest expense (500) 1300 Income before tax 14200 Less: Income tax expense (4500) Net income 9700

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