The following selected accounts and their current balances appear in the ledger

Question

The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2016: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a retained earnings statement. 3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $50,000. 4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheets differ. Selected accounts and related amounts for Clairemont Co. for the fiscal year ended day 31, 2016, are presented in Problem 5-5A. Prepare a single-step income statement in the format shown in Exhibit 11. Prepare a retained earnings statement. Prepare an account form of balance sheet, assuming that the current portion of the note payable is $50,000. Prepare closing entries as of May 31, 2016.

Explanation / Answer

Clairemont Co. Income Statement For the Fiscal Year ended May 31, 2016 Particulars Amount Amount Sales $11,343,000 Cost of Goods Sold $7,850,000 Gross Profit $3,493,000 Operating Expenses Selling Expenses            Sales Salaries Expenses $916,000            Advertising Expense $550,000            Miscellaneous Selling Expense $38,000 $1,504,000 Administrative Expense            Office Salaries Expense $650,000            Miscellaneous Administrative Exp. $14,500 $664,500 Depreciation            Store Equipment $140,000            Office Equipment $50,000 $190,000 Rent Expense $94,000 Insurance Expense $48,000 Office Supplies Expense $28,100 Total Operating Expense $2,528,600 Other Non Operating Income Dvidends $100,000 Interest Expense ($21,000) $79,000 Net Income $1,043,400

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