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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: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of stockholders’ equity. Additional common stock of $7,500 was issued during the year ended June 30, 20Y7. 3. Prepare a balance sheet, assuming that the current portion of the note payable is $7,000. 4. Briefly explain how multiple and single-step income statements differ.

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Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169

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Chapter
Section
BuyFindarrow_forward

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
Chapter 5, Problem 5.5BPR
Textbook Problem
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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:

Chapter 5, Problem 5.5BPR, Multiple-step income statement and balance sheet The following selected accounts and their current , example  1

Chapter 5, Problem 5.5BPR, Multiple-step income statement and balance sheet The following selected accounts and their current , example  2

Instructions

1. Prepare a multiple-step income statement.

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

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

4. Chapter 5, Problem 5.5BPR, Multiple-step income statement and balance sheet The following selected accounts and their current , example  3 Briefly explain how multiple and single-step income statements differ.

(1)

To determine

To Prepare: The income statement of Company K for the year ended June 30, 2018.

Explanation of Solution

Multi step income statement: A multiple step income statement refers to the income statement that shows the operating, and non-operating activities of the business, under separate head. In different steps of the multi-step income statement, principal operating activities are reported that starts from the record of sales revenue with all contra sales revenue account like sales returns, allowances and sales discounts.

The following is the income statement of Company K.

Company K

Income Statement

For the Year Ended June 30, 20Y7

Particulars Amount ($) Amount ($)
Sales 8,925,000
Less: Cost of merchandise sold 5,620,000
Gross profit 3,305,000
Less: Operating Expenses:  
Selling Expenses:  
Sales and salaries expenses 850,000  
Advertising expenses 420,000  
Depreciation expense – store equipment 33,000  
Miscellaneo...

(2)

To determine

To Prepare: The statement of stockholders’ equity of Company K for the year ended June 30, 20Y7.

(3)

To determine

To Prepare: The balance sheet of Company K for the year ended June 30, 20Y7.

(4)

To determine

To Explain: The difference between multiple-step and single-step income statements.

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Chapter 5 Solutions

Corporate Financial Accounting
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