With the information given prepare a statement of stockholders wqui Multiple-Step Income Statement and Report Form of Balance SheetThe following selected accounts and their current balances appear in the ledger of Prescott Inc. for the fiscal year ended September 30, 20Y8:$187,875 Retained Earnings (as of Sept. 30, 20Y7) $ 571,050337,500 Dividends281,250850,500 Sales78,750 Cost of Goods Sold33,750 Sales Salaries Expense27,000 Advertising Expense259,200 Depreciation Expense-Store Equipment111,375 Miscellaneous Selling Expense1,150,875 Office Salaries Expense420,075 Rent Expense109,350 Insurance Expense78,750 Depreciation Expense- Office Equipment21,600 Office Supplies Expense117,000 Miscellaneous Administrative33,750 Interest ExpenseCashAccounts ReceivableInventoryEstimated Returns InventoryOffice SuppliesPrepaid InsuranceOffice EquipmentAccumulated Depreciation- Office EquipmentStore EquipmentAccumulated Depreciation- Store Equipmentccounts PayableCustomer Refunds PayableSalaries PayipleNote Payable (due evenly over next five years)Common StockInstructions:8,025,7504,893,750874,800103,27518,6754,500174,15089,77551,63836,4503,7124,27527,000

Answered: With the information given prepare a…

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter5: Accounting For Retail Businesses

Section: Chapter Questions

Problem 5PB: Multiple-step income statement and balance sheet The following selected accounts and their current...

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Question

With the information given prepare a statement of stockholders wqui

Expert Solution

Step 1

To prepare a statement of stockholders' equity, we need to calculate net income.

Income statement of Prescott Inc.

For the year ended September 30, 20Y8

Particulars	Amount in $	Amount in $

Sales		8,025,750
Cost of goods sold		4,893,750
Gross Profit		3,132,000
Operating Expenses:-
Selling expense:-
Sales salaried expenses	874,800
Advertising expenses	103,275
Depreciation expense- store equipment	18,675
Miscellaneous selling expenses	4,500
Total selling expenses	1,001,250

Administrative expenses:-
Office salaries expenses	174,150
Rent expense	89,775
Insurance expenses	51,638
Depreciation expense- office equipment	36,450
Office supplies expense	3,712
Miscellaneous administration Expense	4,275
Total administration Expense	360,000
Total operating expenses		1,361,250
Operating income		1,770,750
Other expenses:-
Interest expense		27,000
Net Income		1,743,750