Question

Multiple-step income statement and balance sheet Instructions Labels and Amount Descriptions Income Statement Instructions The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2018: Cash $ 243,100 Accounts receivable 964,900 Inventory 1,788,600 21,200 Estimated returns inventory Office supplies Prepaid insurance 17,800 8,400 Office equipment 825,900 543,800 Accumulated depreciation office equipment Store equipment Accumulated depreciation-store equipment 3,609,700 1,814,900 Jenny expenses

Answer 1

Answer 1.

$ 11,281,200 $ 7,858,000 $ 3,423,200 917,600 551,900 149,700 36,600 $ 1,655,800 CLAIREMONT CO. Income Statement For the Year ended May 31, 2018 Sales Cost of Merchandise Sold Gross Profit Expenses: Selling Expenses: Sales Salaries Expense $ Advertising Expense $ Depreciation Expense - Store Equipment $ Miscellaneous Selling Expense $ Total Selling Expense Administrative Expenses: Office Salaries Expense Rent Expense Depreciation Expense - Office Equipment Insurance Expense Office Supplies Expense Miscellaneous Administrative Expense Total Administrative Expenses Total Expenses Income from Operations Other Expense: Interest Expense Net Income 668,600 99,800 56,200 38,600 32,700 7,900 $ 903,800 $ 2,559,600 $ 863,600 $ $ 21,700 841,900

Answer 2.

$ 3,143,700 CLAIREMONT CO. Statement of Owners' Equity For the Year Ended May 31, 2018 Retained earnings, June 1, 2017 Net income for the year $ Less: Dividends $ Increase in retained equity Retained earnings, May 31, 2018 841,900 94,200 $ $ 747,700 3,891,400

Answer 3.

$ $ $ CLAIREMONT CO. Balance Sheet May 31, 2018 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Estimated returns inventory Office Supplies Prepaid Insurance Total Current Assets Property, Plant and Equipment: Office Equipment $ Less: Accumulated Depreciation Office Equipment $ Store Equipment $ Less: Accumulated Depreciation Store Equipment $ Total property, plant, and equipment Total assets 243,100 964,900 1,788,600 21,200 17,800 8,400 $ 3,044,000 282,100 825,900 543,800 $ 3,609,700 1,814,900 $ 1,794,800 $ 2,076,900 $ 5,120,900


Liabilities Current liabilities Accounts Payable Customer Refunds Payable Salaries Payable Notes payable Total current liabilities Long-term liabilities Note Payable (final payment due 2024) Total liabilities 356,300 39,200 44,100 42,000 $ $ 481,600 $ $ 247,000 728,600 Stockholders' Equity $ 500,900 $ 3,891,400 Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ $ 4,392,300 5,120,900

Answer 4.

The multiple-step form of income statement contains various sections for revenues and expenses, with intermediate balances, and concludes with net income. In a single-step form, the total of all expenses is deducted from the total of all revenues. There are no intermediate balances.

In the report form of balance sheet, the assets, liabilities, and owner’s equity are presented in that order in a downward sequence. In the account form, the assets are listed on the left-hand side, and the liabilities and owner’s equity are listed on the right-hand side.