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 lowfat Espresso ’n Cream. Assume that a local Baskin-Robbins in Raleigh, North Carolina, has the following amounts for the month of July 2021. Salaries expense $ 12,100 Sales revenue $ 61,800 Inventory (July 1, 2021) 1,500 Interest income 1,700 Sales returns 1,100 Cost of goods sold 27,900 Utilities expense 2,800 Rent expense 5,100 Income tax expense 4,400 Interest expense 400 Inventory (July 31, 2021) 1,100 Required: 1. Prepare a multiple-step income statement for the month ended July 31, 2021.

Answer 1

Explanation:

The preparation of the multiple -step income statement is presented below:

                                                Baskin-Robbins

                                  Multiple -step income statement

                                    For the month of July 2021

Net Sales                                $60,700

Less: Cost of goods sold      -$27,900

Gross profit                              $32,800

Less: Operating expenses

Utilities expense                       -$2,800

Rent expense                            -$5,100

Salaries expense                      -$12,100

Operating income                     $12,800

Non operating income or others

Interest income                         $1,700

Interest expense                       -$400

Income before income taxes   $14,100

Less: income tax expense       -$4,400

Net income                                $9,700