Question

The following selected accounts and their current balances appear in the ledger of Druid Hills Co. for the fiscal year ended May 31, 20Y8:

Cash	$290,800
Accounts Receivable	1,170,600
Merchandise Inventory	2,075,300
Office Supplies	16,400
Prepaid Insurance	9,700
Office Equipment	1,005,800
Accumulated Depreciation-Office Equipment	666,500
Store Equipment	4,362,700
Accumulated Depreciation-Store Equipment	2,205,600
Accounts Payable	395,100
Customer Refunds Payable	48,500
Salaries Payable	50,300
Note Payable*	363,600
Kristina Marble, Capital	4,179,800
Kristina Marble, Drawing	121,200
Sales	13,746,000
Cost of Merchandise Sold	9,513,000
Sales Salaries Expense	1,110,100
Advertising Expense	666,500
Depreciation Expense-Store Equipment	169,700
Miscellaneous Selling Expense	46,100
Office Salaries Expense	787,700
Rent Expense	113,900
Depreciation Expense-Office Equipment	60,600
Insurance Expense	58,200
Office Supplies Expense	34,100
Miscellaneous Administrative Expense	17,600
Interest Expense	25,400
*final payment due in 10 years

	Required:
1.	Prepare a multiple-step income statement.*
2.	Prepare a statement of owner’s equity.*
3.	Prepare a balance sheet, assuming that the current portion of the note payable is $60,600.*
4.	How multiple-step and single-step income statements differ.

*Be sure to read the instructions for each financial statement carefully.

Labels
Current assets
Current liabilities
For the Year Ended May 31, 20Y8
Long-term liabilities
May 31, 20Y8
Expenses
Other revenue and expense
Property, plant, and equipment
Amount Descriptions
Gross profit
Income from operations
Increase in owner’s equity
Kristina Marble, capital, June 1, 20Y7
Kristina Marble, capital, May 31, 20Y8
Withdrawals
Net income
Net loss
Total administrative expenses
Total assets
Total current assets
Total current liabilities
Total liabilities
Total liabilities and owner’s equity
Total operating expenses
Total property, plant, and equipment
Total selling expenses

Druid Hills Co.

Income Statement

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5	Selling expenses:
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11	Administrative expenses:
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Druid Hills Co.

Statement of Owner’s Equity

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Druid Hills Co.

Balance Sheet

1	Assets
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16	Liabilities
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26	Owner’s Equity
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Answer 1

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