Chapter 5, Problem 5.5BPR

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, 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—
Accumulated Depreciation—		Store Equipment	33,000
Office Equipment	58,000	Miscellaneous Selling Expense	18,000
Store Equipment	650,000	Office Salaries Expense	540,000
Accumulated Depreciation—		Rent Expense	48,000
Store Equipment	87,500	Insurance Expense	24,000
Accounts Payable	38,500	Depreciation Expense—
Customers Refunds Payable	10,000	Office Equipment	10,000
Salaries Payable	4,000	Office Supplies Expense	4,000
Note Payable		Miscellaneous Administrative
(final payment due 2034)	140,000	Exp.	6,000
Common Stock	50,000	Interest Expense	12,000

Instructions

1. 1. Prepare a multiple-step income statement.
2. 2. Prepare a retained earnings statement.
3. 3. Prepare a balance sheet, assuming that the current portion of the note payable is $7,000.
4. 4. Briefly explain how multiple-step and single-step income statements differ.