Question

The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 20Y2:

Cash	$238,400
Accounts receivable	965,200
Inventory	1,771,300
Estimated returns inventory	21,900
Office supplies	17,900
Prepaid insurance	3,300
Office equipment	821,200
Accumulated depreciation-office equipment	544,100
Store equipment	3,601,000
Accumulated depreciation-store equipment	1,816,900
Accounts payable	364,800
Customer refunds payable	44,100
Salaries payable	37,400
Note payable (final payment due in 6 years)	300,000
Common stock	493,800
Retained earnings	2,999,000
Dividends	91,700
Sales	11,320,600
Cost of goods sold	7,851,900
Sales salaries expense	898,300
Advertising expense	559,200
Depreciation expense-store equipment	145,000
Miscellaneous selling expense	39,400
Office salaries expense	648,200
Rent expense	90,800
Depreciation expense-office equipment	47,100
Insurance expense	45,900
Office supplies expense	28,000
Miscellaneous administrative expense	6,300
Interest expense	28,700

	Required:
1.	Prepare a multiple-step income statement. Be sure to complete the statement heading. 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. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
2.	Prepare a statement of stockholders’ equity. Additional common stock of $75,000 was issued during the year ended May 31, 20Y2. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
3.	Prepare a balance sheet, assuming that the current portion of the note payable is $58,000. Be sure to complete the statement heading. 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. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
4.	Briefly explain how multiple-step and single-step income statements differ.

Answer 1

1.  

Clairemont Company
Income Statement
For the year ended May 31, 20Y2
Sales		1,13,20,600
Cost of Goods sold		78,51,900
Gross Profit		34,68,700
Expenses
Selling Expenses:
Sales Salaries Expenses	8,98,300
Advertising Expense	5,59,200
Depreciation Expense-Store Equipment	1,45,000
Miscellaneous selling expense-Store Equipment	39,400
Total Selling Expenses	16,41,900
Administrative Expenses
Office Salaries Expense	6,48,200
Rent Expense	90,800
Depreciation Expense-Office Equipment	47,100
Insurance Expense	45,900
Office Supplies Expense	28,000
Miscellaneous administrative expense	6,300
Total Administrative Expenses	8,66,300
Total Operating expenses		25,08,200
Income from operation		9,60,500
Other Expense
Interest Expense		28,700
Net Income		9,31,800

2.

Clairemont Co.
Statement of owner's equity
For the year ended May 31st,20Y2
	Common Stock	Retained Eranings	Total
Balance	4,93,800	29,99,000	34,92,800
Net Income for the year		9,31,800	9,31,800
Dividends		-91,700	-91,700
Balance May 31st2018	4,93,800	38,39,100	43,32,900

.

3.

Clairemont Co.
Balance Sheet
May 31st,2018
Assets:
Current Assets:
Cash (238400+75000 - from additional isuue )		3,13,400
Accounts Receivable		9,65,200
Merchandise Inventory		17,71,300
Estimated returns Inventory		21,900
Office Supplies		17,900
Prepaid Insurance		3,300
Total Current Assets		30,93,000
Property,Plant and Equipment
Office Equipment	8,21,200
Less: Accumulated Depreciation	5,44,100	2,77,100
Stores Equipment	36,01,000
Less: Accumulated Depreciation	18,16,900	17,84,100
Total Property,Plant and Equipment		20,61,200
Total Assets		51,54,200
Liabilities:
Accounts Payable		3,64,800
Customer Refunds Payable		44,100
Salaries Payable		37,400
Note Payable(Current Portion)		58,000
Total Current Liabilites		5,04,300
Long Term Liabilites:
Note Payable(Final payment due 2024)=($300000-$58000)		242000
Total Liabilites		7,46,300
Owner's Equity & Retained Earnings		44,07,900
Total liabilities and owner's equity		51,54,200

4.

The multiple-step form of income statement contains various sections for revenues and expenses, with intermediate balances, and concludes with net income. In the single-step form, the total of all expenses is deducted from the total of all revenues. There are no intermediate balances