Question

On November 1, 2017, Larkspur, Inc. had the following account balances. The company uses the perpetual inventory method. Debit Credit Cash $10,980 Accumulated Depreciation—Equipment $1,220 Accounts Receivable 2,733 Accounts Payable 4,148 Supplies 1,049 Unearned Service Revenue 4,880 Equipment 30,500 Salaries and Wages Payable 2,074 $45,262 Common Stock 24,400 Retained Earnings 8,540 $45,262 During November, the following summary transactions were completed. Nov. 8 Paid $4,331 for salaries due employees, of which $2,257 is for November and $2,074 is for October. 10 Received $2,318 cash from customers in payment of account. 11 Purchased merchandise on account from Dimas Discount Supply for $9,760, terms 2/10, n/30. 12 Sold merchandise on account for $6,710, terms 2/10, n/30. The cost of the merchandise sold was $4,880. 15 Received credit from Dimas Discount Supply for merchandise returned $366. 19 Received collections in full, less discounts, from customers billed on sales of $6,710 on November 12. 20 Paid Dimas Discount Supply in full, less discount. 22 Received $2,806 cash for services performed in November. 25 Purchased equipment on account $6,100. 27 Purchased supplies on account $2,074. 28 Paid creditors $3,660 of accounts payable due. 29 Paid November rent $458. 29 Paid salaries $1,586. 29 Performed services on account and billed customers $854 for those services. 29 Received $824 from customers for services to be performed in the future.

Prepare a multiple-step income statement for November.

Answer 1