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Multiple-Step Income Statement and Report Form of Balance Sheet The following selected accounts and their current...

Multiple-Step Income Statement and Report Form of Balance Sheet

The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2018:

Cash $118,500 Retained Earnings 522,300
Accounts Receivable 318,800 Dividends 71,000
Inventory 360,200 Sales $4,340,400
Estimated Returns Inventory 22,500 Cost of Goods Sold 2,510,600
Office Supplies 11,200 Sales Salaries Expense 706,000
Prepaid Insurance 8,600 Advertising Expense 194,100
Office Equipment 260,800 Depreciation Expense—
   Store Equipment

37,800
Accumulated Depreciation—
   Office Equipment

177,200
Miscellaneous Selling Expense 16,600
Store Equipment 814,100 Office Salaries Expense 385,400
Accumulated Depreciation—
   Store Equipment

260,800
Rent Expense 56,900
Accounts Payable 180,500 Depreciation Expense—
   Office Equipment

28,500
Customer Refunds Payable 40,000 Insurance Expense 17,600
Salaries Payable 11,500 Office Supplies Expense 10,400
Note Payable
   (final payment due 2024)

380,000
Miscellaneous Administrative Exp. 7,600
Common Stock 56,000 Interest Expense 11,500

Required:

1. Prepare a multiple-step income statement.

Clairemont Co.
Income Statement
For the Year Ended May 31, 2018
Expenses:
Selling expenses:
Total selling expenses
Administrative expenses:
Total administrative expenses
Total operating expenses

2. Prepare a retained earnings statement.

Clairemont Co.
Retained Earnings Statement
For the Year Ended May 31, 2018

3. Prepare a balance sheet, assuming that the current portion of the note payable is $19,000.

Clairemont Co.
Balance Sheet
May 31, 2018
Assets
Current assets:
Total current assets
Property, plant and equipment:
Total property, plant and equipment
Total assets
Liabilities
Current liabilities:
Total current liabilities
Long-term liabilities:
Total liabilities
Stockholders' equity
Total stockholders' equity
Total liabilities and stockholders' equity

Solutions

Expert Solution

Solution: 1
MULTIPLE STEP INCOME STATEMENT
AS ON YEAR ENDED DEC 31. 2020
Amount Amount
Revenue
Sales $          4,340,400
Less: Cost of Goods Sold   $          2,510,600
Gross Profit $          1,829,800
Less: Operating Expenses
Sales Salaries & Expenses $            706,000
Advertising Expenses $            194,100
Depreciation expenses - Store Equipment $               37,800
Depreciation expenses - Office Equipment $               28,500
Office Salaries Expenses $            385,400
Rent Expenses $               56,900
Office Supplies Expenses $               10,400
Insurance Expenses $               17,600
Micllaneous Selling Expenses $               16,600
Micllaneous Admins Expenses $                 7,600
Total Operating Expenses $          1,460,900
Operating Income $              368,900
Non-Operating and others
Interest Expenses $              -11,500
Net Income $              357,400
Solution: 2
Statement of Retained Earnings
AMOUNT
Beginning Balance $            522,300
Add: Net Income of the year $            357,400
Total $            879,700
Less: Dividends $               71,000
Ending balance $            808,700
Solution: 3
BALANCE SHEET
ASSETS AMOUNT   AMOUNT  
CURRENT ASSETS:
Cash $              118,500
Account Receivable $              318,800
Inventory $            360,200
Add: Estimated Return Inventory $               22,500 $              382,700
Office Supplies $                11,200
Prepaid Insurance $                  8,600
Total Current Assets $           839,800
FIXED ASSETS:
Office Equipment $            260,800
Less: Accumulated Depreciation - Office Equip. $            177,200 $                83,600
Stores Equipment $            814,100
Less: Accumulated Depreciation - Stores Equipm. $            260,800 $              553,300
Total Of Fixed Assets $           636,900
TOTAL OF ASSETS $        1,476,700
LIABILITIES & SHAREHOLDER'S EQUITY AMOUNT   AMOUNT   AMOUNT  
CURRENT LIABILITIES:
Account Payable $              180,500
Customer Refund Payable $                40,000
Salaries Payable $                11,500
Total of Currnet Liabilities $           232,000
LONG TERM LIABILITIES:
Note Payable $           380,000
Shareholder's Equity
Common Stock $                56,000
Retaine Earnings $              808,700
Total Stocholder's Equity $           864,700

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