Problem 6-7A (Algo) Prepare a multiple-step income statement and calculate the inventory turnover ratio and gross profit ratio (LO6-2, 6-7)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 2024. Salaries expense$12,600Sales revenue$64,300Inventory (July 1, 2024)1,750Interest income2,200Sales returns1,000Cost of goods sold28,150Utilities expense3,050Rent expense5,600Income tax expense4,900Interest expense300 Inventory (July 31, 2024)1,000Required:1. Prepare a multiple-step income statement for the month ended July 31, 2024.2-a. Calculate the inventory turnover ratio for the month of July.2-b. Would you expect this ratio to be higher or lower in December 2024?3. Calculate the gross profit ratio for the month of July.

Multiple-step Income Statement: A multiple-step income statement is an entity's financial statement…

Answered: Prepare a multiple-step income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem 6-7A (Algo) Prepare a multiple-step income statement and calculate the inventory turnover ratio and gross profit ratio (LO6-2, 6-7)

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 2024.

Salaries expense	$12,600	Sales revenue	$64,300
Inventory (July 1, 2024)	1,750	Interest income	2,200
Sales returns	1,000	Cost of goods sold	28,150
Utilities expense	3,050	Rent expense	5,600
Income tax expense	4,900	Interest expense	300
		Inventory (July 31, 2024)	1,000

Required:

1. Prepare a multiple-step income statement for the month ended July 31, 2024.
2-a. Calculate the inventory turnover ratio for the month of July.
2-b. Would you expect this ratio to be higher or lower in December 2024?
3. Calculate the gross profit ratio for the month of July.

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