In: Accounting
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 |
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---|---|---|---|
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 |
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3. Prepare a balance sheet, assuming that the current portion of the note payable is $19,000.
Clairemont Co. Balance Sheet May 31, 2018 |
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---|---|---|---|---|---|---|
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 |
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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Merchandise Inventory
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Estimated Returns Inventory
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Sales Salaries Expense
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Inventory
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Cost of Goods Sold
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Office Supplies
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Sales Salaries Expense
764,400
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Advertising Expense
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Office Equipment
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Store Equipment
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Cash
$128,300
Retained Earnings
565,500
Accounts Receivable
345,100
Dividends
76,800
Inventory
390,000
Sales
$4,699,500
Estimated Returns Inventory
22,500
Cost of Goods Sold
2,718,300
Office Supplies
12,100
Sales Salaries Expense
764,400
Prepaid Insurance
9,400
Advertising Expense
210,200
Office Equipment
282,400
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511,100
Accounts Receivable
309,200
Dividends
69,400
Inventory
352,500
Sales
$4,247,600
Estimated Returns Inventory
22,500
Cost of Goods Sold
2,456,900
Office Supplies
10,900
Sales Salaries Expense
690,900
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Advertising Expense
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$114,200
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$68,400
Accounts Receivable
307,300
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4,129,600
Merchandise Inventory
347,200
Cost of Merchandise Sold
2,420,000
Estimated Returns Inventory
13,700
Sales Salaries Expense
680,500
Office Supplies
10,800
Advertising Expense
187,100
Prepaid Insurance
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Depreciation Expense—Store Equipment
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Miscellaneous Selling Expense
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$131,200
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$78,600
Accounts Receivable
349,900
Sales
4,744,500
Merchandise Inventory
398,900
Cost of Merchandise Sold
2,780,300
Estimated Returns Inventory
15,750
Sales Salaries Expense
781,800
Office Supplies
12,400
Advertising Expense
215,000
Prepaid Insurance
9,600
Depreciation Expense—Store Equipment
41,900
Office Equipment
288,800
Miscellaneous Selling Expense
18,300
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