Question

Statemere ษd Report Form of Balance Sheet he tolowing selected accounts and their cument buliances a ppear in the ledger of Kanour Co. for the fiscal year ended une 30,2016 92,000 Divideds 50,000 Sales 375000 Cost of Merchandise Sold 0,000 Sales Salaries Expense Prepaid Insuranc Office Equimen 2000 dvertising Expense 3,000 18,000 tone Equipment 50,000 Office Saleres Expense 7,500 Rent Expee 8,500 nsuance Expense 4,000 40000 Office Supplies Expes Salaries Payable oe Payable(napmu 2032) 10,000 81,000 nterest Expense 5 6

Answer 1

A	B	C	D	E	F	G
2
3		Stepwise income statement can be prepared as follows:
4
5		Net Sales		$8,925,000
6		Cost of goods Sold		$5,620,000
7		Gross margin		$3,305,000	=E5-E6
8		Operating expenses:
9		Sales Salaries Expenses	$850,000
10		Advertising Expense	$420,000
11		Depreciation Expense - store equipment	$33,000
12		Miscellaneous Selling Expense	$18,000
13		Office Salaries Expense	$540,000
14		Rent Expense	$48,000
15		Insurance Expense	$24,000
16		Depreciation Expense - Office Equipment	$10,000
17		Office Supplies Expense	$4,000
18		Miscellaneous Administrative Expense	$6,000
19		Operating Expense		$1,953,000	=SUM(D9:D18)
20		Operating income (EBIT)		$1,352,000	=E7-E19
21		Other income (Expense)
22		Interest Expense	($12,000)
23		Total Other Income		($12,000)
24		Taxable income		$1,340,000
25		Tax Expense		$0
26		Net income		$1,340,000	=E24-E25
27
28
29
30		Report form of Balance sheet will be as follows:
31
32			June 30 2016
33		Assets
34		Cash	$92,000
35		Account Receivables	$450,000
36		Merchandise Inventory	$375,000
37		Office Supplies	$10,000
38		Prepaid Insurance	$12,000
39		Current Assets	$939,000	=SUM(D34:D38)
40		Office Equipment	$220,000
41		Less: Accumulated Depreciation - Office Equipment	($58,000)
42		Store Equipment	$650,000
43		Less: Accumulated Depreciation - Store Equipment	($87,500)
44		Net Fixed Assets	$724,500	=SUM(D40:D43)
45		Total Assets	$1,663,500	=D39+D44
46
47		Liabilities and shareholders' equity
48		Account Payable	$48,500
49		Salaries Payable	$4,000
50		Current Liabilities	$52,500	=SUM(D48:D49)
51		Notes Payable (Long Term)	$140,000
52		Total Liabilities	$192,500	=D50+D51
53		Common Stock	$50,000
54		Retained Earnings	$1,721,000	=381000+E26
55		Dividends	($300,000)
56		Shareholders' equity	$1,471,000	=SUM(D53:D55)
57		Total Liabilities and shareholders' equity	$1,663,500	=D52+D56
58