Question

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 low-fat Espresso 'n Cream. Assume that a local Baskin-Robbins in Raleigh, North Carolina, has the following amounts for the month of July 2015.
Salaries expense $12,600 Sales revenue $64,300
Inventory (July 1,2015) 1,750 Interest income 2,200
Sales returns 1,000 Cost of goods sold 28,150
Utilities expense 3,050 Rent expenses 5,600
Income tax expense 4,900 Interest expenese 300
Inventory(July 31,2015) 1,000
Prepare a multiple-step income statement for the month ended July 31, 2015.

Answer 1

Answer:

Net income: $11.900

Explanation:

First, we have to recognize every amount in the income statement. We classify everyone there, except the initial and final inventory because these amounts are part of the financial position statement (see attachment)

Then, we can made the income statement and it should be this way:

Baskin-Robbins  

Income Statement  

1st to 31st July 2015  

 

Sales revenue                      $64.300,00

Sales returns                                -$1.000,00

Net sales                             =$63.300,00

Cost of goods sold               -$28.150,00

Gross profit                              =$36.150,00

Operating expenses  

Salaries expenses     -$12.600,00  

Utilities expenses      -$3.050,00  

Rent expenses      -$5.600,00       -$21.250,00  

Operating income                        =$14.900,00  

Other incomes and expenses  

Interest income $2.200,00  

Interest expense -$300,00           +$1.900,00

 

Income before tax                           =$16.800,00

Income tax expenses                    -$4.900,00

Net income                                    =$11.900,00