The following selected accounts and their current balances appear in the ledger
ID: 2605709 • Letter: T
Question
The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2019:
Cash $ 240,000
Accounts Receivable 966,000
Merchandise Inventory 1,690,000
Estimated Returns Inventory 22,500
Office Supplies 13,500
Prepaid Insurance 8,000
Office Equipment 830,000
Accumulated Depreciation-Office Equipment 550,000
Store Equipment 3,600,000
Accumulated Depreciation-Store Equipment 1,820,000
Accounts Payable 326,000
Customer Refunds Payable 40,000
Salaries Payable 41,500
Note Payable (final payment due 2022) 300,000
Kristina Marble, Capital 3,449,100
Kristina Marble, Drawing 100,000
Sales 11,343,000
Cost of Merchandise Sold 7,850,000
Sales Salaries Expense 916,000
Advertising Expense 550,000
Depreciation Expense-Store Equipment 140,000
Miscellaneous Selling Expense 38,000
Office Salaries Expense 650,000
Rent Expense 94,000
Depreciation Expense-Office Equipment 50,000
Insurance Expense 48,000
Office Supplies Expense 28,100
Miscellaneous Administrative Expense 14,500
Interest Expense 21,000
~~1. Prepare a multiple-step income statement. In the Other expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.
Explanation / Answer
Clairemont Co.
Income Statement
For the year ended May 31, 2019
$ $ $ Sales 11,343,000 Cost of Merchandise Sold 7,850,000 Gross Profit 3,493,000 Selling and Administrative Expenses Selling Expenses Sales Salaries Expense 916,000 Advertising Expense 550,000 Miscellaneous Selling Expense 38,000 Depreciation Expense: Store Equipment 140,000 1,644,000 Administrative Expense Office Salaries Expense 650,000 Rent Expense 94,000 Insurance Expense 48,000 Office Supplies 28,100 Depreciation Expense: Office Equipment 50,000 Miscellaneous Administrative Expense 14,500 884,600 Total Selling and Administrative Expenses 2,528,600 Income from Operations 964,400 Other Expenses Interest Expense - 21,000 Net Income 943,400