Problem 6-5A Current Balances Kanpur Co. Fiscal Year Assignment

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

Cash – $92,000

Accounts Receivable – $450,000

Merchandise Inventory – $370,000

Estimated Returns Inventory – $5,000

Office Supplies – $10,000

Prepaid Insurance – $12,000

Office Equipment – $220,000

Accumulated Depreciation

—Office Equipment – $58,000

—Store Equipment – $650,000

Accumulated Depreciation

–Store Equipment – $87,500

Accounts Payable – $38,500

Customer Refunds Payable $10,000

Salaries Payable – $4,000

Note Payable

(final payment due 2032) – $140,000

Gerri Faber, Capital – $431,000

Gerri Faber, Drawing – $300,000

Sales – $8,925,000

Cost of Merchandise Sold – $5,620,000

Sales Salaries Expense – $850,000

Advertising Expense – $420,000

Depreciation Expense

—Store Equipment – $33,000

Miscellaneous Selling Expense $18,000

Office Salaries Expense – $540,000

Rent Expense – $48,000

Insurance Expense – $24,000

Depreciation Expense

—Office Equipment – $10,000

Office Supplies Expense – $4,000

Miscellaneous Administrative Exp. – $6,000

Interest Expense -$12,000

Instructions

1. Prepare a multiple-step income statement.

2. Prepare a statement of owner’s equity.

3. Prepare a balance sheet, assuming that the current portion of the note payable is $7,000.

4. Briefly explain how multiple-step and single-step income statements differ.