Antonios Italian Restaurant believes they have done well in their second year of operation. They are thinking it is time to open another location. They read in an industry trade journal that a successful restaurant will maintain a 60% gross profit and have net income of $100,000. Antonios believes they have met this criteria and ask you for advice on the expansion. They give you the following income statement for your review. You point out that the statement has errors. Antonios assures you the numbers are correct but they may be listed in the wrong place.

Antonios Italian Restaurant

Income Statement

Year Ended December 31, 20XX

Net Sales Revenue $ 195,000

Gain on Sale of Land 34,600

Total Revenue 229,600

Cost of Goods Sold 85,200

Gross Profit 144,400

Operating Expenses:

Salaries Expense 40,600

Interest Expense 1,000

Depreciation Expense 1800

Utilities Expense 6700

Total Operating Expense 50,100

Income from Operations 94,300

Other Income:

Sales Discounts Forfeited 5,700

Net Income $ 100,000

Requirement: Prepare a MULTI-STEP INCOME STATEMENT and make your recommendation to Antonios. Make sure you use the new headings (Other Income and (Expenses) and Operating Income). Base your recommendation on the total amount of Income from Operations and the correct gross profit%. Make a note: Income from Operations should only contain revenue from the actual restaurant.