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:

Cash $ 243,100 Accounts Receivable 964,900 Merchandise Inventory 1,788,600 Office Supplies 19,700 Prepaid Insurance 6,400 Office Equipment 828,400 Accumulated Depreciation-Office Equipment 545,900 Store Equipment 3,593,800 Accumulated Depreciation-Store Equipment 1,829,700 Accounts Payable 360,900 Salaries Payable 41,000 Note Payable (final payment due 2022) 298,000 Kristina Marble, Capital 3,583,500 Kristina Marble, Drawing 102,600 Sales 11,287,400 Cost of Merchandise Sold 7,850,900 Sales Salaries Expense 919,600 Advertising Expense 549,100 Depreciation Expense-Store Equipment 148,000 Miscellaneous Selling Expense 35,500 Office Salaries Expense 644,000 Rent Expense 103,700 Depreciation Expense-Office Equipment 42,000 Insurance Expense 39,900 Office Supplies Expense 33,900 Miscellaneous Administrative Expense 20,700 Interest Expense 11,600

Explanation / Answer

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4.

(a)

A multi-step income statement lists the expenses according to the activity for which they are incurred(like selling,administration etc.) , whereas a single-step income statement lists all the expenses under one common head "Expenses".

(b)

A "Report fomr balance sheet" displays the assets and liabilities in a single column one below the other, (first assets and then liabilities) , whereas "Account-form balance sheet" shows the assets on the left side cloumns and the iabilities on the right side columns.

CLAIRMONT COMPANY Income statement for the year ending May31, 2016 Sales 11287400 Cost of goods sold 7850900 Gross profit 3436500 Selling and administrative expenses    Selling expenses:     Sales salaries expense 919600     Advertising expense 549100     Miscellaneous expense 35500     Total selling expense 1504200     Administrative expenses:     Depreciation expense - store equipment 148000     Office salaries expense 644000     Rent expense 103700     Depreciation expense - Office expense 42000     Insurance expense 39900     Office supplies expense 33900     Miscellaneous administrative expense 20700     Total administrative expense 1032200 Total selling administrative expenses 2536400 Net operating income 900100 Other expense: Interest expense -11600 Net income 888500

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