Obj. 3 PR 5-5B Multiple-step income statement and balance sheet The following se

Question

Obj. 3 PR 5-5B Multiple-step income statement and balance sheet The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 2018: 381,000 92,000 Retained Earnings 450,000Dividends 370,000Sales Cash Accounts Receivable Inventory Estimated Returns Inventory Office Supplies Prepaid Insurance Office Equipment Accumulated Depreciation- 300,000 8,925,000 5,000Cost of Goods Sold 10,000 Sales Salaries Expense 12,000 Advertising Expense 5,620,000 850,000 420,000 220,000Depreciation Expense- Store Equipment Miscellaneous Selling Expense Office Salaries Expense Rent Expense Insurance Expense Depreciation Expense- 33,000 18,000 540,000 48,000 24,000 58,000 Office Equipment Store Equipment Accumulated Depreciation- 650,000 Store Equipment Accounts Payable Customers Refunds Payable Salaries Payable Note Payable (final payment due 2034) Common Stock 87,500 38,500 10,000 4,000 Office Equipment Office Supplies Expense Miscellaneous Administrative 10,000 4,000 140,000 Exp. Interest Expense 6,000 50,000 12,000

Explanation / Answer

Income statement Revenue Sales 8925000 Cost of Good sold 5620000 Gross profit 3305000 Less: Selling And Administrative expenses Selling Expenses Sales salaries $850,000 Advertising expenses $420,000 Depreciation expenses=store $33,000 Miscelleneous selling expenses $18,000 Total selling Expenses $1,321,000 Adminsitrative expenses Office salaries $540,000 Rent expenses $48,000 Insurance expenses $24,000 Depreciation expenses-office equ $10,000 Office supplies expenses $4,000 Mis administrative exp $6,000 Total Adminsitrative expenses $632,000 Total Selling And Administrative expenses $1,953,000 Net operating income $1,352,000 Les: Interest expenses $12,000 Net Income $1,340,000 Statement of Retained Ernings Beginning Retained Eranings Bal 381000 Add: Net Income $1,340,000 $1,721,000 Less: Dividend -300000 Ending Balance $1,421,000 Balance Sheet Assets Current assets Cash $92,000 Accounst Receivable 450000 Inventory 370000 Estimated Return Inventory 5000 Office Supplies 10000 Prepaid Insurance $12,000 Total Current assets $939,000 Property Plant & Equipment Store equipment 650000 Accumulated Dep-Store Equipment 87500 562500 Office equipment 220000 Accumulated Dep-Office Equipment 58000 162000 Total Assets $1,663,500 Liabilities & stockholder equity Current Liabilities Accounst Payable $38,500 Notes payable $7,000 Customers Refund Payable $10,000 salaries payable 4000 Total Current Liabilities $59,500 Long term Notes payable 133000 Total Liabilities $192,500 stockholder equity Common stock 50000 Retaine Eranings 1421000 Total stockholder equity $1,471,000 Total Liabilities & stockholder equity $1,663,500 $0 ans d In multiple step income statement shows detailed information about the gross profit, operating profit, non operating income and expenses and finally the net income. Whereas in single steps statement all operating and non operating income are added together and all operating and non operating expenses are subtracted together from all income to get net income

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