1. Use the data in P5–6B to prepare Massood’s Muffins’ multi-step income statement for the year ended July 31, 2023.

2. Massood Sterling, the owner of the company, strives to earn a gross margin of at least 50 percent and a net income of 20 percent (Net income percentage = Net income , Net sales revenue). Did the business achieve these goals? Show your calculations. Round your answer to one decimal place.

Data from P5–6B

The accounts of Massood’s Muffins at July 31, 2023, are listed in alphabetical order below. For simplicity, all operating expenses are summarized in the accounts Selling Expenses and General Expenses. Massood’s Muffins uses the perpetual inventory system.

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Accounts Payable... Accounts Receivable.. Accumulated Amortization- Store Equipment...... M. Sterling, Capital.. M. Sterling, Withdrawals. Cash..... Cost of Goods Sold.. General Expenses... Interest Expense. Interest Payable. Interest Revenue.. $ 31,000 78,500 30,750 451,700 41,150 3,100 803,000 122,125 5,100 4,400 750 Inventory. Notes Payable, Long-Term........... Salaries Payable... Sales Discounts. Sales Returns and Allowances.. Sales Revenue. Selling Expenses. Store Equipment... Supplies Unearned Sales Revenue.............. $ 262,500 250,000 11,500 12,500 26,400 945,600 158,625 242,000 8,100 37,400