The following selected accounts and their current balances appear in the ledger

Question

The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 2019:

Cash $117,800 Gerri Faber, Drawing $70,500 Accounts Receivable 314,000 Sales 4,258,000 Merchandise Inventory 358,000 Cost of Merchandise Sold 2,495,300 Estimated Returns Inventory 14,150 Sales Salaries Expense 701,700 Office Supplies 11,100 Advertising Expense 193,000 Prepaid Insurance 8,600 Depreciation Expense—Store Equipment 37,600 Office Equipment 259,200 Miscellaneous Selling Expense 16,500 Accumulated Depreciation—Office Equipment 176,100 Office Salaries Expense 383,100 Store Equipment 809,100 Rent Expense 56,600 Accumulated Depreciation—Store Equipment 259,200 Insurance Expense 17,500 Accounts Payable 179,400 Depreciation Expense—Office Equipment 28,300 Customer Refunds Payable 28,300 Office Supplies Expense 10,400 Salaries Payable 11,500 Miscellaneous Administrative Exp. 7,500 Note Payable (final payment due 2032) 377,500 Interest Expense 11,500 Gerri Faber, Capital 631,450 1. Prepare a multiple-step income statement. Kanpur Co Income Statement For the Year Ended June 30, 2019 Expenses Selling expenses: Total selling expenses Administrative expenses: Total administrative expenses Total operating expenses

Explanation / Answer

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Kanpur Co Income Statement For the year ended June 30, 2019 Sales $ 4,258,000 Cost of merchandise sold $ 2,495,300 Gross profit $ 1,762,700 Expenses Selling expenses Sales salaries expense $ 701,700 Advertising expense $ 193,000 Depreciation expense - Stores equipment $    37,600 Miscllanious selling expenses $    16,500 Total selling expenses $ 948,800 Administrative expenses Office salaries expense $ 383,100 Rent expense $    56,600 Insurance expense $    17,500 Depreciation expense - Office equipment $    28,300 Office supplies expense $    10,400 Miscllanious administrative expenses $      7,500 Total administrative expenses $ 503,400 Total operating expenses $ 1,452,200 Net operating income $     310,500 Interest expenses $        11,500 Net income $     299,000

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