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	$109,100		Retained Earnings	$480,800
Accounts Receivable	290,900		Dividends	65,300
Inventory	331,600		Sales	3,995,800
Estimated Returns Inventory	5,000		Cost of Goods Sold	2,311,300
Office Supplies	10,300		Sales Salaries Expense	649,900
Prepaid Insurance	8,000		Advertising Expense	178,700
Office Equipment	240,100		Depreciation Expense—    Store Equipment	34,800
Accumulated Depreciation—    Office Equipment	163,100		Miscellaneous Selling Expense	15,300
Store Equipment	749,400		Office Salaries Expense	354,800
Accumulated Depreciation—    Store Equipment	240,100		Rent Expense	52,400
Accounts Payable	166,100		Depreciation Expense—    Office Equipment	26,200
Customer Refunds Payable	10,000		Insurance Expense	16,200
Salaries Payable	10,600		Office Supplies Expense	9,600
Note Payable    (final payment due 2024)	350,000		Miscellaneous Administrative Exp.	7,000
Common Stock	60,000		Interest Expense	10,600

Required:

1. Prepare a multiple-step income statement.

Kanpur Co. Income Statement For the Year Ended June 30, 20Y7
Cash Inventory Prepaid insurance Sales discounts Sales			$
Accounts payable Cost of goods sold Insurance expense Inventory Store Equipment
Accounts payable Gross profit Operating income Net income Net sales			$
Expenses:
Selling expenses:
Cost of goods sold Net sales Office supplies Sales discounts Sales salaries expense	$
Accounts payable Advertising expense Cash Depreciation expense-office equipment Sales returns and allowances
Accounts receivable Accumulated depreciation-store equipment Common stock Depreciation expense-store equipment Store equipment
Cost of goods sold Miscellaneous selling expense Office equipment Office salaries expense Sales
Total selling expenses		$
Administrative expenses:
Common stock Inventory Office salaries expense Office supplies Sales	$
Accounts payable Accounts receivable Notes payable Rent expense Sales returns and allowances
Accounts payable Cash Insurance expense Prepaid insurance Sales discounts
Accumulated depreciation-office equipment Cash Depreciation expense-office equipment Office equipment Office supplies
Accounts payable Office equipment Office supplies expense Office supplies Sales returns and allowances
Accounts receivable Interest expense Miscellaneous administrative expense Notes payable Sales
Total administrative expenses
Total operating expenses
Gross profit Operating income Loss from operations Net income Net loss			$
Cost of goods sold Gross profit: Net sales: Other revenue and expense: Other income:
Advertising expense Interest expense Miscellaneous selling expense Office supplies expense Sales discounts
Gross profit Operating income Loss from operations Net income Net loss			$

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
Balances, July 1, 20Y6 Balances, June 30, 20Y7 Dividends Issued common stock Net income Net loss	$	$	$
Balances, July 1, 20Y6 Balances, June 30, 20Y7 Dividends Issued common stock Net income Net loss
Balances, July 1, 20Y6 Balances, June 30, 20Y7 Dividends Issued common stock Net income Net loss
Balances, July 1, 20Y6 Balances, June 30, 20Y7 Dividends Issued common stock Net income Net loss
Balances, July 1, 20Y6 Balances, June 30, 20Y7 Dividends Issued common stock Net income Net loss	$	$	$

3. Prepare a balance sheet, assuming that the current portion of the note payable is $17,500.

KANPUR CO. Balance Sheet June 30, 20Y7
Assets
Current assets:
Accounts payable Cash Office equipment Rent expense Sales		$
Accounts payable Accounts receivable Common stock Interest expense Store equipment
Accumulated depreciation Interest expense Inventory Note payable Sales returns and allowances
Estimated returns inventory Office equipment Office supplies expense Office supplies Sales discounts
Common stock Office equipment Office supplies expense Office supplies Sales discounts
Accounts payable Cost of goods sold Insurance expense Note payable Prepaid insurance
Total current assets			$
Property, plant, and equipment:
Accounts receivable Cash Office equipment Office supplies expense Office supplies	$
Accounts payable Accumulated depreciation-office equipment Cash Depreciation expense Rent expense
Accounts payable Book value-office equipment Cash Depreciation expense Rent expense		$
Cash Cost of goods sold Prepaid insurance Salaries payable Store equipment	$
Accumulated depreciation-store equipment Depreciation expense Inventory Sales discounts Store equipment
Book value-store equipment Depreciation expense Inventory Sales discounts Store equipment
Total property, plant, and equipment
Total assets			$
Liabilities
Current liabilities:
Accounts payable Accounts receivable Cash Prepaid insurance Sales returns and allowances		$
Accumulated depreciation Office salaries expense Office supplies Salaries payable Sales salaries expense
Customer refunds payable Inventory Note payable (current portion) Office equipment Sales
Cost of goods sold Inventory Note payable (current portion) Office equipment Sales
Total current liabilities			$
Long-term liabilities:
Cash Note payable (long-term portion) Office equipment Prepaid insurance Sales
Total liabilities			$
Stockholders' equity
Accounts receivable Common stock Cash Prepaid insurance Sales		$
Accounts receivable Cash Retained earnings Salaries payable Sales
Total stockholders' equity
Total liabilities and stockholders' equity			$

4. Which type of income statement shows intermediate balances?

Answer 1