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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:
| Account | Amount |
| Cash | $111,400 |
| Accounts Receivable | 297,000 |
| Inventory | 338,600 |
| Estimated Returns Inventory | 5,000 |
| Office Supplies | 10,500 |
| Prepaid Insurance | 8,100 |
| Office Equipment | 245,100 |
| Accumulated DepreciationOffice Equipment | 166,600 |
| Store Equipment | 765,200 |
| Accumulated DepreciationStore Equipment | 245,100 |
| Accounts Payable | 166,600 |
| Salaries Payable | 10,800 |
| Customer Refunds Payable | 10,000 |
| Estimated Coupons Payable | 3,000 |
| Note Payable (final payment due in 20 years) | 355,000 |
| Maya Kanpur, Capital | 554,600 |
| Maya Kanpur, Drawing | 66,700 |
| Sales | 4,080,100 |
| Cost of Goods Sold | 2,360,000 |
| Sales Salaries Expense | 663,700 |
| Advertising Expense | 182,500 |
| Depreciation ExpenseStore Equipment | 35,600 |
| Miscellaneous Selling Expense | 15,600 |
| Office Salaries Expense | 362,300 |
| Rent Expense | 53,500 |
| Insurance Expense | 16,600 |
| Depreciation ExpenseOffice Equipment | 26,700 |
| Office Supplies Expense | 9,800 |
| Miscellaneous Administrative Expense | 7,100 |
| Interest Expense | 10,800 |
Required:
1. Prepare a multiple-step income statement.
| Line Item Description | Amount | Amount | Amount |
| CashInventoryPrepaid insuranceSales discountsSales | | | $fill in the blank 2 |
| Accounts payableCost of goods soldInsurance expenseInventoryStore Equipment | | | fill in the blank 4 |
| Accounts payableGross profitOperating incomeNet incomeNet sales | | | $fill in the blank 6 |
| Expenses: | | | |
| Selling expenses: | | | |
| Cost of goods soldNet salesOffice suppliesSales discountsSales salaries expense | $fill in the blank 8 | | |
| Accounts payableAdvertising expenseCashDepreciation expense-office equipmentSales returns and allowances | fill in the blank 10 | | |
| Accounts receivableAccumulated depreciation-store equipmentCommon stockDepreciation expense-store equipmentStore equipment | fill in the blank 12 | | |
| Cost of goods soldMiscellaneous selling expenseOffice equipmentOffice salaries expenseSales | fill in the blank 14 | | |
| Total selling expenses | | $fill in the blank 15 | |
| Administrative expenses: | | | |
| Common stockInventoryOffice salaries expenseOffice suppliesSales | $fill in the blank 17 | | |
| Accounts payableAccounts receivableNotes payableRent expenseSales returns and allowances | fill in the blank 19 | | |
| Accounts payableCashInsurance expensePrepaid insuranceSales discounts | fill in the blank 21 | | |
| Accumulated depreciation-office equipmentCashDepreciation expense-office equipmentOffice equipmentOffice supplies | fill in the blank 23 | | |
| Accounts payableOffice equipmentOffice supplies expenseOffice suppliesSales returns and allowances | fill in the blank 25 | | |
| Accounts receivableInterest expenseMiscellaneous administrative expenseNotes payableSales | fill in the blank 27 | | |
| Total administrative expenses | | fill in the blank 28 | |
| Total operating expenses | | | fill in the blank 29 |
| Gross profitOperating incomeLoss from operationsNet incomeNet loss | | | $fill in the blank 31 |
| Cost of goods soldGross profit:Net sales:Other revenue and expense:Other income: | | | |
| Advertising expenseInterest expenseMiscellaneous selling expenseOffice supplies expenseSales discounts | | | fill in the blank 34 |
| Gross profitOperating incomeLoss from operationsNet incomeNet loss | | | $fill in the blank 36 |
2. Prepare a statement of owners equity. Maya Kanpur invested an additional $7,500 in the business during the year ended June 30, 20Y7.
| Line Item Description | Total |
| Additional investment by ownerMaya Kanpur, capital, July 1, 20Y6Maya Kanpur, capital, June 30, 20Y7Net income for the yearWithdrawals | $fill in the blank 38 |
| Additional investment by ownerMaya Kanpur, capital, July 1, 20Y6Maya Kanpur, capital, June 30, 20Y7Net loss for the yearWithdrawals | fill in the blank 40 |
| Maya Kanpur, capital, July 1, 20Y6Maya Kanpur, capital, June 30, 20Y7Net income for the yearNet loss for the yearWithdrawals | fill in the blank 42 |
| Additional investment by ownerMaya Kanpur, capital, July 1, 20Y6Maya Kanpur, capital, June 30, 20Y7Net loss for the yearWithdrawals | fill in the blank 44 |
| Issued common stockMaya Kanpur, capital, July 1, 20Y6Maya Kanpur, capital, June 30, 20Y7Net income for the yearWithdrawals | $fill in the blank 46 |
3. Prepare a balance sheet, assuming that the current portion of the note payable is $17,750.
| Assets | | | |
| Current assets: | | | |
| Accounts payableCashOffice equipmentRent expenseSales | | $fill in the blank 48 | |
| Accounts payableAccounts receivableCommon stockInterest expenseStore equipment | | fill in the blank 50 | |
| Accumulated depreciationInterest expenseInventoryNote payableSales returns and allowances | | fill in the blank 52 | |
| Estimated returns inventoryOffice equipmentOffice supplies expenseOffice suppliesSales discounts | | fill in the blank 54 | |
| Common stockOffice equipmentOffice supplies expenseOffice suppliesSales discounts | | fill in the blank 56 | |
| Accounts payableCost of goods soldInsurance expenseNote payablePrepaid insurance | | fill in the blank 58 | |
| Total current assets | | | $fill in the blank 59 |
| Property, plant, and equipment: | | | |
| Accounts receivableCashOffice equipmentOffice supplies expenseOffice supplies | $fill in the blank 61 | | |
| Accounts payableAccumulated depreciation-office equipmentCashDepreciation expenseRent expense | fill in the blank 63 | | |
| Accounts payableBook value-office equipmentCashDepreciation expenseRent expense | | $fill in the blank 65 | |
| CashCost of goods soldPrepaid insuranceSalaries payableStore equipment | $fill in the blank 67 | | |
| Accumulated depreciation-store equipmentDepreciation expenseInventorySales discountsStore equipment | fill in the blank 69 | | |
| Book value-store equipmentDepreciation expenseInventorySales discountsStore equipment | | fill in the blank 71 | |
| Total property, plant, and equipment | | | fill in the blank 72 |
| Total assets | | | $fill in the blank 73 |
| Liabilities | | | |
| Current liabilities: | | | |
| Accounts payableAccounts receivableCashPrepaid insuranceSales returns and allowances | | $fill in the blank 75 | |
| Accumulated depreciationOffice salaries expenseOffice suppliesSalaries payableSales salaries expense | | fill in the blank 77 | |
| Customer refunds payableInventoryNote payable (current portion)Office equipmentSales | | fill in the blank 79 | |
| Estimated coupons payableInventoryNote payable (current portion)Office equipmentSales | | fill in the blank 81 | |
| Cost of goods soldInventoryNote payable (current portion)Office equipmentSales | | fill in the blank 83 | |
| Total current liabilities | | | $fill in the blank 84 |
| Long-term liabilities: | | | |
| CashNote payable (long-term portion)Office equipmentPrepaid insuranceSales | | | fill in the blank 86 |
| Total liabilities | | | $fill in the blank 87 |
| Owner's equity | | | |
| CashMaya Kanpur, capitalOffice equipmentPrepaid insuranceSales | | | fill in the blank 89 |
| Total liabilities and owner's equity | | | $fill in the blank 90 |
4. Which type of income statement shows intermediate balances?
Answer & Explanation
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