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	$ 240,000
Accounts Receivable	966,000
Merchandise Inventory	1,712,500
Office Supplies	13,500
Prepaid Insurance	8,000
Office Equipment	830,000
Accumulated Depreciation-Office Equipment	550,000
Store Equipment	3,600,000
Accumulated Depreciation-Store Equipment	1,820,000
Accounts Payable	366,000
Salaries Payable	41,500
Note Payable (final payment due 2022)	300,000
Kristina Marble, Capital	3,449,100
Kristina Marble, Drawing	100,000
Sales	11,343,000
Cost of Merchandise Sold	7,850,000
Sales Salaries Expense	916,000
Advertising Expense	550,000
Depreciation Expense-Store Equipment	140,000
Miscellaneous Selling Expense	38,000
Office Salaries Expense	650,000
Rent Expense	94,000
Depreciation Expense-Office Equipment	50,000
Insurance Expense	48,000
Office Supplies Expense	28,100
Miscellaneous Administrative Expense	14,500
Interest Expense	21,000

	Required:
1.	Prepare a multiple-step income statement. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.*
2.	Prepare a statement of owner’s equity.*
3.	Prepare a report form of balance sheet, assuming that the current portion of the note payable is $50,000. “Less” or “Plus” will automatically appear if it is required.*
4.	Answer the questions on (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheets differ.

* Be sure to complete the statement headings. Refer to the problem data and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required.

Answer 1