Question

Multiple-Step Income Statement and Report Form of Balance Sheet

The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 2018:

Cash $92,000 Retained Earnings $381,000
Accounts Receivable 450,000 Dividends 300,000
Inventory 370,000 Sales 8,925,000
Estimated Returns Inventory 5,000 Cost of Goods Sold 5,620,000
Office Supplies 10,000 Sales Salaries Expense 850,000
Prepaid Insurance 12,000 Advertising Expense 420,000
Office Equipment 220,000 Depreciation Expense—Store Equipment 33,000
Accumulated Depreciation—Office Equipment 58,000 Miscellaneous Selling Expense 18,000
Store Equipment 650,000 Office Salaries Expense 540,000
Accumulated Depreciation—Store Equipment 87,500 Rent Expense 48,000
Accounts Payable 38,500 Insurance Expense 24,000
Customers Refunds Payable 10,000 Depreciation Expense—Office Equipment 10,000
Salaries Payable 4,000 Office Supplies Expense 4,000
Note Payable (final payment due 2034) 140,000 Miscellaneous Administrative Exp. 6,000
Common Stock 50,000 Interest Expense 12,000

Required:

1. Prepare a multiple-step income statement.

KANPUR CO.
Income Statement
For the Year Ended June 30, 2018



Expenses:
Selling expenses:




Total selling expenses
Administrative expenses:






Total administrative expenses
Total operating expenses

2. Prepare a retained earnings statement.

KANPUR CO.
Retained Earnings Statement
For the Year Ended June 30, 2018

3. Prepare a balance sheet, assuming that the current portion of the note payable is $7,000.

KANPUR CO.
Balance Sheet
June 30, 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

4. Which type of income statement shows intermediate balances?

Answer 1