The Cheesecake Factory Incorporated (NASDAQ: CAKE) operates over 200 restaurants and two bakeries in the United States. In its two bakeries, it bakes and prepares more than 70 desserts, both for its own use in its restaurants and for sale to a wide variety of wholesalers and retailers. The Cheesecake Factory's inventories consist of restaurant food and supplies, bakery raw materials, and bakery finished goods. To account for its inventory, the company uses the average-cost method at its restaurants and the FIFO method at its bakeries. The Cheesecake Factory Incorporated's financial statements from its 2016 Form 10-K are as follows: (Click the icon to view the balance sheet.) (Click the icon to view the income statement.) Inventory on the balance sheet is based on the of the inventory, while sales revenue on the income statement is based on the A. average cost, profit margin B. gross profit, cost of goods sold C. price, gross profit D. cost, sale price The Cheesecake Factory Incorporated Consolidated Balance Sheets: Condensed and adapted for educational use (in thousands, except share data) Assets January 3, 2017 December 29, 2015 Current assets: Cash and cash equivalents $ 53,839 $ 43,854 Accounts receivable 15,632 14,159 Income tax receivable 18,739 Other receivables 64,592 72,658 Inventories 34,926 52,438 34,010 41,976 Prepaid expenses Total current assets 221,427 225,396 Property and equipment, net 910,134 892,191 Other assets: Intangible assets, net 23,054 21,972 Prepaid rent 42,162 96,542 46,881 46,906 Other assets Total other assets 161,758 115,759 $ 1,293,319 $ 1,233,346 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 47,770 41,564 $ 334,962 Other accrued expenses 302,456 Total current liabilities 376,526 350,226 Noncurrent liabilities 313,586 294,581 The Cheesecake Factory Incorporated Consolidated Statements of Income: Condensed and adapted for educational use (in thousands) Fiscal Year 2016 2015 2014 Revenues 2,275,719 $ 2,100,609 $ 1,976,624 Costs and expenses: Cost of sales 526,628 504,031 490,306 Labor expenses 759,998 684,818 646,102 Depreciation and amortization expense 88,010 700,090 85,563 660,951 82,835 612,650 Other expenses Total costs and expenses 2,074,726 1,935,363 1,831,893 Income from operations 200,993 (9,225) 165,246 (5,894) 144,731 (6,187) Interest and other expense, net Income before income taxes 191,768 52,274 159,352 42,829 138,544 37,268 Income tax expense 139,494 $ 116,523 $ 101,276 Net income