Question

1) a) Merchandise Inventory. 10/31/2017 b) Accrued interest on Notes Receivable c) Unexpired Store Rent d) Depreciation on Equipment e) Accrued interest on Notes Payable f) Accrued Office Salaries g) Store Supplies on hand h) Bad debts is based on the aging of Accounts Receivable i) Expired Insurance 1 219,000 1.500 8,200 10,000 2,500 6.100 11.000 16,500 7,800 2) Prepare a Multi-Step Income Statement for the year ended October 31, 2017 OR 3) Prepare a Classified Balance Sheet as of October 31, 2017 Note: Only ONE financial statement is to be prepared.

Answer 1

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Ans: Multi Step Income Statement for the year ended October 31, 2017: Amount Particulars Sales Less: Sales Dicount Less: Sales Return and Allowances Net Sales Amount Amount 357500 15200 14300 328000 Less: Cost of Goods Sold Opening Stock Add: Purchases Add: Freight In Less: Purchase Discount Less: Purchase Return & Allownce Less: Closing Stock as on 10/31/2017 Gross Profit 235000 122000 20000 23900 11100 219000 123000 205000 Add: Other Income: Interest Income Add: Accrued Intest on Notes Receivable 26700 1500 28200 Less: Selling Expenses Utilities Expenses Depreciation on Equipment Bad Debt 12000 10000 16500 38500 Less: General & Administrative Expenses Office Salaries and Expenses Add: Accrued office Salary 17000 6100 23100

Store Rent: Prepaid Store Rent as on 10/31/2016 Add: Paid during the year Less: Prepaid Store Rent as on 10/31/2017 19200 25500 8200 36500 Stores Supplies Balance on hand as on 10/31/2016 Less: Balance as on 10/31/2017 21200 11000 10200 Insurance: Prepaid Insurance as on 10/31/2016 Add: Insurance Due 20800 7800 28600 98400 Less: Other Expenses: Interest Expenses Add: Accrued Interest on Notes Payable 18000 2500 20500 Net Profit 75800

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