Question

Multiple-step income statement and balance sheet

The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 20Y7:

Cash	$126,400		Retained Earnings	$557,100
Accounts Receivable	337,000		Dividends	75,700
Inventory	384,200		Sales	4,629,600
Estimated Returns Inventory	5,000		Cost of Goods Sold	2,677,900
Office Supplies	11,900		Sales Salaries Expense	753,000
Prepaid Insurance	9,200		Advertising Expense	207,100
Office Equipment	278,200		Depreciation Expense—    Store Equipment	40,300
Accumulated Depreciation—    Office Equipment	189,000		Miscellaneous Selling Expense	17,700
Store Equipment	868,300		Office Salaries Expense	411,100
Accumulated Depreciation—    Store Equipment	278,200		Rent Expense	60,700
Accounts Payable	192,500		Depreciation Expense—    Office Equipment	30,400
Customer Refunds Payable	10,000		Insurance Expense	18,800
Salaries Payable	12,300		Office Supplies Expense	11,100
Note Payable    (final payment due 2024)	405,000		Miscellaneous Administrative Exp.	8,100
Common Stock	70,700		Interest Expense	12,300

Required:

1. Prepare a multiple-step income statement.

Kanpur Co. Income Statement For the Year Ended June 30, 20Y7
Sales			$
Cost of goods sold
Gross profit			$
Expenses:
Selling expenses:
Sales salaries expense	$
Advertising expense
Depreciation expense-store equipment
Miscellaneous selling expense
Total selling expenses		$
Administrative expenses:
Office salaries expense	$
Rent expense
Insurance expense
Depreciation expense-office equipment
Office supplies expense
Miscellaneous administrative expense
Total administrative expenses
Total operating expenses
Operating income			$
Other revenue and expense:
Interest expense
Net income			$

2. Prepare a statement of stockholders’ equity. Additional common stock of $7,500 was issued during the year ended June 30, 20Y7.

Kanpur Co. Statement of Stockholders’ Equity For the Year Ended June 30, 20Y7
	Common Stock	Retained Earnings	Total
Balances, July 1, 20Y6	$	$	$
Issued common stock
Net income
Dividends
Balances, June 30, 20Y7	$	$	$

3. Prepare a balance sheet, assuming that the current portion of the note payable is $20,250.

KANPUR CO. Balance Sheet June 30, 20Y7
Assets
Current assets:
Cash		$
Accounts receivable
Inventory
Estimated returns inventory
Office supplies
Prepaid insurance
Total current assets			$
Property, plant, and equipment:
Office equipment	$
Accumulated depreciation-office equipment
Book value-office equipment		$
Store equipment	$
Accumulated depreciation-store equipment
Book value-store equipment
Total property, plant, and equipment
Total assets			$
Liabilities
Current liabilities:
Accounts payable		$
Salaries payable
Customer refunds payable
Note payable (current portion)
Total current liabilities			$
Long-term liabilities:
Note payable (long-term portion)
Total liabilities			$
Stockholders' equity
Common stock		$
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity			$

Answer 1