Jen Ramirez opened Cliffords Pet Toy Warehouse on July 1, 2020. Cliffords Pet Toy Warehouse extends credit terms of 2/10, n/30 to all of its customers. During July the following transactions occurred.

July 1 Issued 100,000 shares of common stock for $100,000 cash.

2 Paid $1,800 cash on 1-year insurance policy effective July 1.

3 Purchased pet toys on account for $1,900 from Cleo Toy Company, terms 2/10, n/30.

4 Purchased supplies for $900 on account from Norman Supply.

5 Sold pet toys on account to the Jettas Pet Shop for $1,200. The cost of the pet toys sold was $720.

6 Purchased a used delivery truck from Howard Motors for $9,000, paying $2,000 cash and the balance via loan from Howard Motors.

7 Received $100 credit for pet toys returned to Cleo Toy Company.

9 Paid Cleo Toy Company in Full.

15 Received payment in full from Jettas Pet Shop.

17 Sold pet toys on account to Charleys Pet Store for $1,400. The cost of the pet toys sold was $840.

18 Repaid Howard Motors $1,000 cash toward the amount owed on truck and paid $500 toward the amount owed on supplies.

20 Purchased toys on account for $700 from Mac Toy Maker, terms 1/15, n/30.

21 Paid $2000 cash for employee salaries.

24 Received payment in full from Charleys Pet Store.

26 Sold pet toys on account to T-Bone for $1300. The cost of the pet toys sold was $780.

27 Granted T-Bone $130 credit for pet toys costing $80 that were returned.

29 Paid $260 for delivery truck repairs.

30 Declared and paid $600 cash dividend.

31 Paid Mac Toy Maker in full.

ANSWER THESE PLEASE:

1.) Prepare a multi-step income statement for Cliffords Pet Toy Warehouse for July. (Hint: start with Net Sales.)

2.) Prepare a single-step income statement for Cliffords Pet Toy Warehouse for July.

3.) Explain which income statement (multi-step or single-step) will Jen Ramirez and other users would prefer for Cliffords Pet Toy Warehouse and why.

4.) Calculate the Gross Profit Ratio (also known as the Gross Margin Ratio) as well as the Profit Margin Ratio. Given the ratios you calculated, explain why you believe Cliffords decision to pay shareholders a $600 dividend was a good or bad idea.

(PLEASE USE EXCELL OR GOOGLE SHEETS)