The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 20Y2: Cash Accounts receivable Inventory Estimated returns inventory Office supplies Prepaid insurance Office equipment Accumulated depreciation office equipment Store equipment Accumulated depreciation-store equipment Accounts payable Customer refunds payable Salaries payable Note payable (final payment due in 6 years) Common stock Retained earnings Dividends Sales Cost of goods sold Sales salaries expense Advertising expense Depreciation expense-store equipment Miscellaneous selling expense Office salaries expense Rent expense Depreciation expense-office equipment Insurance expense Office supplies expense Miscellaneous administrative expense Interest expense $232,700 957,000 1,668,600 21,300 15,600 18,000 827,000 556,000 3,594,800 1,827,100 361,900 43,400 41,900 296,000 501,600 2,796,300 99,900 11,403,800 7,842,100 923,100 540,500 134,900 37,800 664,400 101,000 45,900 42,700 31,800 7,100 11,800 Required: 1. Prepare a multiple-step income statement. Be sure to complete the statement heading. Refer to the problem data and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign. 2. Prepare a statement of stockholders' equity. Additional common stock of $75,000 was issued during the year ended May 31, 2012. Refer to t list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you mu enter subtracted or negative numbers use a minus sign. 3. Prepare a balance sheet, assuming that the current portion of the note payable is $58,000. Be sure to complete the statement heading. Refer the problem data and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign. 4. Briefly explain how multiple-step and single-step income statements differ.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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