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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Single-step income statement

Selected accounts and related amounts for Clairemont Co. for the fiscal year ended May 31, 2019, are presented in Problem 6-5A.

Instructions

1.    Prepare a single-step income statement in the format shown in Exhibit 12.

2.    Prepare closing entries as of May 31, 2019-

(1)

To determine

Single-step income statement format in which a single subtotal of all revenue items are listed in one column and a single subtotal of all expense items including cost of goods sold are listed in another column. Thus, the subtotal of all expense items is deducted from the subtotal of all revenue items to arrive at the net income at the bottom of the statement.

To Prepare: The income statement of Company C for the year ended May 31, 2019.

Explanation

The following is the income statement of Company C.

Company C

Income Statement

For the Year Ended May 31, 2019

Particulars Amount ($) Amount ($)
Sales 11,343,000
Less: Expenses:
         Cost of merchandise s...

(2)

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company C.

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