Chapter 6, Problem 6.5BPR

Multiple step income statement and balance sheet

The following selected accounts anti their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 2019:

Cash	$92,000
Accounts Receivable	450,000
Merchandise Inventory	370,000
Estimated Returns Inventory	5,000
Office Supplies	10,000
Prepaid Insurance	12,000
Office Equipment	220,000
Accumulated Depreciation—Office Equipment	58,000
Store Equipment	650,000
Accumulated Depreciation—Store Equipment	87,500
Accounts Payable	38,500
Customer Refunds Payable	10,000
Salaries Payable	4,000
Note Payable
(final payment due 2032)	140,000
Gerri Faber. Capital	431,000
Gerri Faber, Drawing	$300,000
Sales	8,925,00
Cost of Merchandise Sold	5,620,00
Sales Salaries Expense	850,000
Advertising Expense	420,000
Depreciation Expense— Store Equipment	33,000
Miscellaneous Selling Expense	18,000
Office Salaries Expense	540,000
Rent Expense	48,000
Insurance Expense	24,000
Depredation Expense—Office Equipment	10,000
Office Supplies Expense	4,000
Miscellaneous Administrative Exp.	6,000
Interest Expense	12,000

Instructions

1.    Prepare a multiple-step income statement.

2.    Prepare a statement of owner’s equity.

3.    Prepare a balance sheet, assuming that the current portion of the note payable is $7,000.

4.    Briefly explain how multiple-step and single-step income statements differ.