Question

1. The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2018:

   Cash	$123,500		Retained Earnings	544,200
   Accounts Receivable	335,100		Dividends	73,900
   Inventory	375,300		Sales	$4,522,400
   Estimated Returns Inventory	22,500		Cost of Goods Sold	2,615,800
   Office Supplies	11,600		Sales Salaries Expense	735,600
   Prepaid Insurance	9,000		Advertising Expense	202,300
   Office Equipment	271,700		Depreciation Expense—    Store Equipment	39,400
   Accumulated Depreciation—    Office Equipment	184,600		Miscellaneous Selling Expense	17,300
   Store Equipment	848,200		Office Salaries Expense	401,600
   Accumulated Depreciation—    Store Equipment	271,700		Rent Expense	59,300
   Accounts Payable	188,000		Depreciation Expense—    Office Equipment	29,600
   Customer Refunds Payable	40,000		Insurance Expense	18,400
   Salaries Payable	12,000		Office Supplies Expense	10,900
   Note Payable    (final payment due 2024)	395,000		Miscellaneous Administrative Exp.	7,900
   Common Stock	63,000		Interest Expense	12,000

   Required:

   1. Prepare a multiple-step income statement.

   Clairemont Co. Income Statement For the Year Ended May 31, 2018
   Expenses:
   Selling expenses:
   Total selling expenses
   Administrative expenses:
   Total administrative expenses
   Total operating expenses

   2. Prepare a retained earnings statement.

   Clairemont Co. Retained Earnings Statement For the Year Ended May 31, 2018

   3. Prepare a balance sheet, assuming that the current portion of the note payable is $19,750.

   Clairemont Co. Balance Sheet May 31, 2018
   Assets
   Current assets:
   Total current assets
   Property, plant and equipment:
   Total property, plant and equipment
   Total assets
   Liabilities
   Current liabilities:
   Total current liabilities
   Long-term liabilities:
   Total liabilities
   Stockholders' equity
   Total stockholders' equity
   Total liabilities and stockholders' equity

   4. a. Which type of income statement shows intermediate balances?
   

Answer 1

Clairemont Co. 4522400 2615800 1906600 735600 202300 39400 17300 994600 Income Statement For the Year Ended May 31, 2018 Sales Cost of Merchandise sold Gross Profits Operating Expenses: Selling Expenses: Sales Salaries Expense Advertising Expense Depreciation Expense - Store Equip. Miscellaneous Selling expense Total Selling expense Administrative Expense: Office Salaries Expense Rent Expense Depreciation Expense - Office Equipment Insurance expense Office supplies expense Miscellaneous administrative expense Tota administrative expense Total Operating expense Income from Operations Other Income and expense: Interest expense Net Income 401600 59300 29600 18400 10900 7900 527700 1522300 384300 -12000 372300 544200 Retained Earnings For the Year Ended May 31, 2018 Retained Earnings June 1,2017 Net Income for the year Less:Dividends Increase in Retained Earnings Retained Earnings May 31, 2018 372300 -73900 298400 842600 4a.Multiple-step income statement shows intermediate balances

Balance sheet As at 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: Store Equipment Less :Accumulated depreciation - Store equipment Office Equipment Less :Accumulated depreciation - Office equipment Total Property, Plant and equipment Total Assets 123500 335100 375300 22500 11600 9000 877000 576500 848200 -271700 271700 -184600 87100 663600 1540600 188000 19750 40000 12000 259750 Liabilities Current Liabilities: Accounts Payable Notes Payable Customer Refunds Payable Salaries Payable Total current liabilities Long Term Liabilities: Note Payable Total Liabilities Stockholders Equity: Common Stock Retained Earnings Total stockholders equity Total Liabilities & stockholders equity 375250 635000 63000 842600 905600 1540600