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Multiple-step income statement and balance sheet The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31. 2019: Cash $240,000 Accounts Receivable 966,000 Merchandise Inventory 1,690,000 Estimated Returns Inventory 22,500 Office Supplies 13,500 Prepaid Insurance 8,000 Office Equipment 830,000 Accumulated Depreciation— Office Equipment 550,000 Store Equipment 3,600,000 Accumulated Depreciation— Store Equipment 1,820,000 Accounts Payable 326,000 Customer Refunds Payable 40,000 Salaries Payable 41,500 Note Payable (final payment due 2022) 300,000 Kristina Marble, Capital 3,449,100 Kristina Marble, Drawing $ 100,000 Sales 11,343,000 Cost of Merchandise Sold 7,850,000 Sales Salaries Expense 916,000 Advertising Expense 550,000 Depreciation Expense— Store Equipment 140,000 Miscellaneous Selling Expense 38,000 Office Salaries Expense 650,000 Rent Expense 94,000 Depreciation Expense- Office Equipment 50,000 Insurance Expense 48,000 Office Supplies Expense 28,100 Miscellaneous Administrative Exp. 14,500 Interest Expense 21,000 Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of owner’s equity. 3. Prepare a balance sheet, assuming that the current portion of the note payable is $50,000. 4. Briefly explain how multiple-step and single-step income statements differ.

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Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 6, Problem 6.5APR
Textbook Problem

Multiple-step income statement and balance sheet

The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31. 2019:

Cash $240,000
Accounts Receivable 966,000
Merchandise Inventory 1,690,000
Estimated Returns Inventory 22,500
Office Supplies 13,500
Prepaid Insurance 8,000
Office Equipment 830,000
Accumulated Depreciation—  
Office Equipment 550,000
Store Equipment 3,600,000
Accumulated Depreciation—  
Store Equipment 1,820,000
Accounts Payable 326,000
Customer Refunds Payable 40,000
Salaries Payable 41,500
Note Payable  
(final payment due 2022) 300,000
Kristina Marble, Capital 3,449,100
Kristina Marble, Drawing $ 100,000
Sales 11,343,000
Cost of Merchandise Sold 7,850,000
Sales Salaries Expense 916,000
Advertising Expense 550,000
Depreciation Expense—  
Store Equipment 140,000
Miscellaneous Selling Expense 38,000
Office Salaries Expense 650,000
Rent Expense 94,000
Depreciation Expense-  
Office Equipment 50,000
Insurance Expense 48,000
Office Supplies Expense 28,100
Miscellaneous Administrative Exp. 14,500
Interest Expense 21,000

Instructions

1.    Prepare a multiple-step income statement.

2.    Prepare a statement of owner’s equity.

3.    Prepare a balance sheet, assuming that the current portion of the note payable is $50,000.

4.    Briefly explain how multiple-step and single-step income statements differ.

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Chapter 6 Solutions

Accounting
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