Problem 5-4A (Part Level Submission) Prepare a multiple-step income statement an
ID: 2563007 • Letter: P
Question
Problem 5-4A (Part Level Submission)
Prepare a multiple-step income statement and classified balance sheet
Problem 5-4A (Part Level Submission)
Wolford Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company’s fiscal year on November 30, 2017, these accounts appeared in its adjusted trial balance.Accounts Payable $ 40,200 Accounts Receivable 25,800 Accumulated Depreciation—Equipment 102,000 Cash 12,000 Common Stock 52,500 Cost of Goods Sold 921,450 Freight-Out 9,300 Equipment 235,500 Depreciation Expense 20,250 Dividends 18,000 Gain on Disposal of Plant Assets 3,000 Income Tax Expense 15,000 Insurance Expense 13,500 Interest Expense 7,500 Inventory 39,300 Notes Payable 65,250 Prepaid Insurance 9,000 Advertising Expense 50,250 Rent Expense 51,000 Retained Earnings 21,300 Salaries and Wages Expense 175,500 Sales Revenue 1,356,000 Salaries and Wages Payable 9,000 Sales Returns and Allowances 30,000 Utilities Expense 15,900
Additional data: Notes payable are due in 2021.
Explanation / Answer
Multistep Income Statement
Particulars
Amount ($)
Sales
1356000
Less: Sales Returns and allowances
30000
Net Sales
1326000
Cost of Goods sold
921450
Gross Profit
404550
Less: Operating Expenses
Advertising Expenses
50250
Freight Out
9300
Depreciation Expense
20250
Utilities Expense
15900
Salaries & Wages
175500
Rent Expense
51000
Insurance Expense
13500
Total Operating Expenses
335700
Operating Income
68850
Non Operating Income and Expenses
Gain on disposal of Plant Assets
3000
Interest Expense
7500
Income Tax Expense
15000
Total Non Operating Expense
-19500
Net Income
49350
Statement of Retained Earnings
Beginning Retained Earnings
21300
Net Income
49350
Less: Dividends on Common Stock
18000
Ending retained earnings
52650
Balance Sheet
Current Assets
Current Liabilities
Cash
12000
Accounts Payable
40200
Accounts Receivable
25800
Salaries Payable
9000
Inventory
39300
Prepaid Insurance
9000
Long term Liabilities
Total Current Assets
86100
Notes Payable
65250
Equipment
235500
Total Liabilities
114450
Less: Accumulated Depreciation
102000
Stock Holders Equity
133500
Capital Stock
52500
Retained Earnings
52650
Total Stock Holders Equity
105150
Total Assets
219600
Total Liabilities and Stockholders Equity
219600
Multistep Income Statement
Particulars
Amount ($)
Sales
1356000
Less: Sales Returns and allowances
30000
Net Sales
1326000
Cost of Goods sold
921450
Gross Profit
404550
Less: Operating Expenses
Advertising Expenses
50250
Freight Out
9300
Depreciation Expense
20250
Utilities Expense
15900
Salaries & Wages
175500
Rent Expense
51000
Insurance Expense
13500
Total Operating Expenses
335700
Operating Income
68850
Non Operating Income and Expenses
Gain on disposal of Plant Assets
3000
Interest Expense
7500
Income Tax Expense
15000
Total Non Operating Expense
-19500
Net Income
49350
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.