FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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INCOME STATEMENT,OWNER EQUITY AND
The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 2019:
| Cash | $112,500 | Gerri Faber, Drawing | $67,400 | |
| 302,600 | Sales | 4,066,600 | ||
| Merchandise Inventory | 341,900 | Cost of Merchandise Sold | 2,383,000 | |
| Estimated Returns Inventory | 13,500 | Sales Salaries Expense | 670,100 | |
| Office Supplies | 10,600 | Advertising Expense | 184,300 | |
| Prepaid Insurance | 8,200 | 35,900 | ||
| Office Equipment | 247,500 | Miscellaneous Selling Expense | 15,700 | |
| 168,200 | Office Salaries Expense | 365,800 | ||
| Store Equipment | 772,700 | Rent Expense | 54,000 | |
| Accumulated Depreciation—Store Equipment | 247,500 | Insurance Expense | 16,800 | |
| Accounts Payable | 171,300 | Depreciation Expense—Office Equipment | 27,000 | |
| Customer Refunds Payable | 27,000 | Office Supplies Expense | 9,900 | |
| Salaries Payable | 10,900 | Miscellaneous Administrative Exp. | 7,200 | |
| Note Payable (final payment due 2032) | 360,000 | Interest Expense | 10,900 | |
| Gerri Faber, Capital | 606,000 |
Required:
1. Prepare a multiple-step income statement.
| Kanpur Co. Income Statement For the Year Ended June 30, 2019 |
|||
|---|---|---|---|
| Sales | |||
| Cost of merchandise sold | |||
| Gross profit | |||
| Expenses: | |||
| Selling expenses: | |||
| Sales salaries expense | |||
| Advertising expense | |||
| Depreciation expense-store equipment | |||
| Miscellaneous selling expense | |||
| Total selling expenses | |||
| Administrative expenses: | |||
| Office salaries expense | |||
| Rent expense | |||
| Insurance expense | |||
| Depreciation expense-office equipment | |||
| Office supplies expense | |||
| Miscellaneous administrative expense | |||
| Total administrative expenses | |||
| Total operating expenses | |||
| Income from operations | |||
| Other expense: | |||
| Interest expense | |||
| Net income |
2. Prepare a statement of owner's equity.
| Kanpur Co. Statement of Owner's Equity For the Year Ended June 30, 2019 |
||
|---|---|---|
3. Prepare a balance sheet, assuming that the current portion of the note payable is $14,400.
| Kanpur Co. Balance Sheet June 30, 2019 |
|||
|---|---|---|---|
| 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 | |||
| Owner's equity | |||
| Total liabilities and owner's equity |
4. Which type of income statement shows intermediate balances?
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