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, 2014:
|
Cash
|
$ 92,000
|
Sales
|
$9,175,000
|
|
Accounts Receivable
|
450,000
|
Sales Returns and Allowances
|
160,000
|
|
Merchandise Inventory
|
375,000
|
Sales Discounts
|
90,000
|
|
Office Supplies
|
10,000
|
Cost of Merchandise Sold
|
5,620,000
|
|
Prepaid Insurance
|
12,000
|
Sales Salaries Expense
|
850,000
|
|
Office Equipment
|
220,000
|
Advertising Expense
|
420,000
|
|
Accumulated Depreciation-
|
|
Depreciation Expense-
|
|
|
Office Equipment
|
58,000
|
Store Equipment
|
33,000
|
|
Store Equipment
|
650,000
|
Miscellaneous Selling Expense
|
18,000
|
|
Accumulated Depreciation-
|
|
Office Salaries Expense
|
540,000
|
|
Store Equipment
|
87,500
|
Rent Expense
|
48,000
|
|
Accounts Payable
|
48,500
|
Insurance Expense
|
24,000
|
|
Salaries Payable
|
4,000
|
Depreciation Expense-
|
|
|
Note Payable
|
|
Office Equipment
|
10,000
|
|
(final payment due 2032)
|
140,000
|
Office Supplies Expense
|
4,000
|
|
Capital Stock
|
50,000
|
Miscellaneous Administrative Exp.
|
6,000
|
|
Retained Earnings
|
381,000
|
Interest Expense
|
12,000
|
|
Dividends
|
300,000
|
|
|
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 $7,000.
4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheets differ.