Question

Multiple-step income statement and balance sheet

The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 20Y7:

Cash	$112,800		Retained Earnings	$497,100
Accounts Receivable	300,700		Dividends	67,500
Inventory	342,800		Sales	4,130,700
Estimated Returns Inventory	5,000		Cost of Goods Sold	2,389,300
Office Supplies	10,600		Sales Salaries Expense	671,900
Prepaid Insurance	8,200		Advertising Expense	184,800
Office Equipment	248,200		Depreciation Expense—    Store Equipment	36,000
Accumulated Depreciation—    Office Equipment	168,700		Miscellaneous Selling Expense	15,800
Store Equipment	774,700		Office Salaries Expense	366,800
Accumulated Depreciation—    Store Equipment	248,200		Rent Expense	54,200
Accounts Payable	171,700		Depreciation Expense—    Office Equipment	27,100
Customer Refunds Payable	10,000		Insurance Expense	16,800
Salaries Payable	11,000		Office Supplies Expense	9,900
Note Payable    (final payment due 2024)	360,000		Miscellaneous Administrative Exp.	7,200
Common Stock	63,900		Interest Expense	11,000

Required:

1. Prepare a multiple-step income statement.

Kanpur Co. Income Statement For the Year Ended June 30, 20Y7
			$
			$
Expenses:
Selling expenses:
	$
Total selling expenses		$
Administrative expenses:
	$
Total administrative expenses
Total operating expenses
			$
			$

2. Prepare a statement of stockholders’ equity. Additional common stock of $7,500 was issued during the year ended June 30, 20Y7.

Kanpur Co. Statement of Stockholders’ Equity For the Year Ended June 30, 20Y7
	Common Stock	Retained Earnings	Total
	$	$	$
	$	$	$

3. Prepare a balance sheet, assuming that the current portion of the note payable is $18,000.

KANPUR CO. Balance Sheet June 30, 20Y7
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. Which type of income statement shows intermediate balances?

Answer 1

Answer 1.

$ 4,130,700 $ 2,389,300 $ 1,741,400 KANPUR CO. Income Statement For the Year Ended June 30, 2017 Sales Cost of merchandise sold Gross profit Expenses: Selling expenses: Sales salaries expense $ 671,900 Advertising expense $ 184,800 Depreciation expense-store equipment $ 36,000 Miscellaneous selling expense $ 15,800 Total selling expenses Administrative expenses: Office salaries expense $ 366,800 Rent expense $ 54,200 Insurance expense $ 16,800 Depreciation expense-office equipment $ 27,100 Office supplies expense $ 9,900 Miscellaneous administrative expense $ 7,200 Total administrative expenses Total operating expenses Income from operations Other expenses: Interest expense Net income $ 908,500 $ 482,000 $ 1,390,500 $ 350,900 $ $ 11,000 339,900

Answer 2.

Total KANPUR CO. Statement of Stockholders' Equity For the Year Ended June 30, 20Y 7 Common Stock $ 56,400 $ $ 7,500 $ $ $ 63,900 $ Balances, July 1, 2016 Common stock issued Net income Dividends Balances, June 30, 2017 Retained Earnings 497,100 $ $ 339,900 $ -67,500 $ 769,500 $ 553,500 7,500 339,900 -67,500 833,400 $

Answer 3.

112,800 300,700 342,800 5,000 10,600 8,200 $ 780,100 79,500 KANPUR CO. Balance Sheet June 30, 2017 Assets Current assets: Cash Accounts receivable $ Inventory $ Estimated returns inventory Office supplies $ Prepaid insurance Total current assets Property, plant and equipment: Office equipment $ 248,200 Less: Accumulated depreciation $ 168,700 $ Store equipment $ 774,700 Less: Accumulated depreciation $ 248,200 $ Total property, plant and equipment Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities: Accounts payable Customer refunds payable $ Salaries payable $ Note payable (current portion) Total current liabilities Long-term Liabilities: Note payable (final payment due 2024) Total liabilities Stockholders' equity Total liabilities and stockholders' equity 526,500 $ 606,000 $ 1,386,100 171,700 10,000 11,000 18,000 $ 210,700 $ 342,000 $ 552,700 $ 833,400 $ 1,386,100

Answer 4.

Multi-step income statement shows intermediate balances.