Question

Exercise I: Steele Floor Coverings reported the following summarized data at December 31, 2018. Accounts appear in no particular order, and all have normal balances. Prepare the trial balance of Steele Floor Coverings at December 31, 2018 $15,000 2,100 18,000 Service Revenue $44,000 Salaries Payable Equipment Rent Expense Steele, Capital Accounts Payable Steele, Withdrawals 12,700 Utilities Expense 38,000 Salaries Expense 8,000 Cash 16,000 Accounts Receivable 4,600 1,400 Interest Payable 8,500 1,500 Exercise II: Capital City Motorcycle's selected accounts as of December 31, 2018, follow: Selling Expenses $10,500 Interest Revenue Net Sales Revenue 1,000 113,500 85,000 Administrative Expense 8,000 Cost of Goods Sold Prepare the multi-step income statement for the year ended December 31, 2018.

Answer 1

Exercise 1

Trail balance of steel floor as on 31st december 2018

PARTICULARS	DEBIT	CREDIT
Service revenue		44000
equipment	38000
Rent expense	8000
Steele capital		16000
Accounts payable		1400
Steele withdrawals	12700
Salaries payable		15000
Salaries expense	2100
Cash	18000
Accounts receivables	4600
interest payable		8500
Utilites expense	1500

TOTAL 84900     84900

Excericise 2

Multi step income statement on 31^st December 2018

Sales revenue -                                      113500
Cost of goods sold -                              85000
                                                            ----------------
Gross profit -                                          28500

Operating expenses

Selling expense                                     (10500)

Administrative expense                       (8000)
                                                       --------------------

Operating profit                                  10000

Non operating or other income

Interest revenue                                    1000
                                                        -------------------
Net income                                             11000