Question

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	$116,000		Retained Earnings	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
Prepaid Insurance	8,500		Advertising Expense	190,000
Office Equipment	255,200		Depreciation Expense—    Store Equipment	37,000
Accumulated Depreciation—    Office Equipment	173,400		Miscellaneous Selling Expense	16,200
Store Equipment	796,600		Office Salaries Expense	377,200
Accumulated Depreciation—    Store Equipment	255,200		Rent Expense	55,700
Accounts Payable	176,600		Depreciation Expense—    Office Equipment	27,800
Customer Refunds Payable	40,000		Insurance Expense	17,300
Salaries Payable	11,300		Office Supplies Expense	10,200
Note Payable    (final payment due 2024)	370,000		Miscellaneous Administrative Exp.	7,400
Common Stock	53,500		Interest Expense	11,300

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
Retained earnings, June 1, 2017
Net income for the year
Plus dividends
Less dividends

3. Prepare a balance sheet, assuming that the current portion of the note payable is $18,500.

Clairemont Co. Balance Sheet May 31, 2018
Assets
Current assets:
Cash
Accounts receivable
Inventory
Estimated returns inventory
Office supplies
Prepaid insurance
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

4. a. Which type of income statement shows intermediate balances?

Answer 1

Answer 1-3.

Answer 4-a.

Contribution Margin Income Statement shows intermediate balances