Multiple-step income statement and report form of balance sheet The following se

Question

Multiple-step income statement and report form of balance sheet The following selected accounts and their current balances appear in the ledger of Claremont Co. for the fiscal year ended May 31, 2016: Instructions Prepare a multiple-step income statement. Prepare a retained earnings statement. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $50,000 Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheets differ.

Explanation / Answer

1 Clairemont Co. Income Statement For the year ended may 31, 2016 Revenue Sales 11,343,000 Cost of Goods Sold                   7,850,000 Selling Expenses Sales Salaries Expenses            916,000 Advertising Expenses            550,000 Depriciation Expenses            140,000 Miscellaneous Expenses               38,000                   1,644,000 General and Administration Expenses Office salaries Expenses            650,000 Rent Expenses               94,000 Depriciation Expenses               50,000 Insurance Expenses               48,000 Office Supplies Expenses               28,100 Miscellaneous Administrative Expenses               14,500                      884,600 Others Interest Expenses                        21,000 10,399,600 Income before tax         943,400 Retained Earning 2 Opening balance                   2,949,100 Profit for Current year            943,400 Less: Dividend Paid            100,000                      843,400 Retained Earning balance                   3,792,500 3 Clairemont Co. Balance Sheet As on may 31, 2016 Liabilities Amt. Assest Amt. Current Assest Common Stock 500000 Cash 240000 Retained Earning 3792500 Account Recievable 966000 Notes payable Long term 250000 Merchandise inventory 1712500 Current Liabilities Office Supplies 13500 Notes payable Current Liabilites 50000 Prepaid Insurance 8000 Salries Payble 41500 Accounts payable 366000 Fixed Assest Office Equipmet         830,000 Less: Depriciation 550000           280,000 Store Equipmet      3,600,000 Less: Depriciation      1,820,000        1,780,000         5,000,000        5,000,000 In Multiple income statement expenses detail and income detail present in category wise But in Single Step it will present in simple without any category

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