Chapter 5, Problem 5.6BPR

(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 K for the year ended June 30, 2018.

(2)

To determine

To Prepare: The retained earnings statement of Company K for the year ended June 30, 2018.

(3)

To determine

To Prepare: The balance sheet of Company K for the year ended June 30, 2018.

(4)

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 K.