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 Kanpur Co. for the fiscal year ended June 30, 2019:

Required:

1. Prepare a multiple-step income statement.

2. Prepare a statement of owner's equity.

3. Prepare a balance sheet, assuming that the current portion of the note payable is $16,800.

4. Which type of income statement shows intermediate balances?

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Cash $131,200 Gerri Faber, Drawing $78,600 Accounts Receivable 349,900 Sales 4,744,500 Merchandise Inventory 398,900 Cost of Merchandise Sold 2,780,300 Estimated Returns Inventory 15,750 Sales Salaries Expense 781,800 Office Supplies 12,400 Advertising Expense 215,000 Prepaid Insurance 9,600 Depreciation Expense—Store Equipment 41,900 Office Equipment 288,800 Miscellaneous Selling Expense 18,300 Accumulated Depreciation—Office Equipment 196,300 Office Salaries Expense 426,800 Store Equipment 901,500 Rent Expense 63,000 Accumulated Depreciation—Store Equipment 288,800 Insurance Expense 19,500 Accounts Payable 199,800 Depreciation Expense—Office Equipment 31,500 Customer Refunds Payable 31,500 Office Supplies Expense 11,600 Salaries Payable 12,800 Miscellaneous Administrative Exp. 8,400 Note Payable (final payment due 2032) 420,000 Interest Expense 12,800 Gerri Faber, Capital 703,850

Explanation / Answer

1.

2.

3.

4. Multi-step income statement.

Kanpur Co. Income Statement For the Year Ended June 30, 2019 Sales 4744500 Cost of goods sold 2780300 Gross profit 1964200 Expenses: Selling expenses: Sales salaries expense 781800 Advertising expense 215000 Depreciation expense-store equipment 41900 Miscellaneous selling expense 18300 Total selling expenses 1057000 Administrative expenses: Office salaries expense 426800 Rent expense 63000 Insurance expense 19500 Depreciation expense-office equipment 31500 Office supplies expense 11600 Miscellaneous administrative expense 8400 Total administrative expenses 560800 Total operating expenses 1617800 Income from operations 346400 Other revenue and expense: Interest expense -12800 Net income 333600

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