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.
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.
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter6: Inventories
Section: Chapter Questions
Problem 6.3ADM: Monster Beverage and Brown-Forman: Inventory turnover 7 and number of days' sales in inventory...
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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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