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 $12,400 Sales revenue $63,300
Inventory (July 1, 2021) 1,650 Interest income 2,000
Sales returns 1,100 Cost of goods sold 28,050
Utilities expense 2,950 Rent expense 5,400
Income tax expense 4,700 Interest expense 400
Inventory (July 31, 2021) 1,100
Required:
a. Prepare a multiple-step income statement for the month ended July 31, 2015.
b. Calculate the inventory turnover ratio for the month of July. Would you expect this ratio to be higher or lower in December 2015? Explain.
c. Calculate the gross profit ratio for the month of July.