ACCT Assignment 2

Instructions

1. Prepare a multiple-step income statement.

2. Prepare a retained earnings statement.

3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $8,000.

4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheets differ.

✓ 1. Net income, $775,000

The following selected accounts and their current balances appear in the ledger of Aqua Co. for the fiscal year ended June 30, 2013:

Cash

$ 83,500

Sales

$3,625,000

Accounts Receivable

150,000

Sales Returns and Allowances

37,800

Merchandise Inventory

380,000

Sales Discounts

20,200

Office Supplies

15,000

Cost of Merchandise Sold

2,175,000

Prepaid Insurance

12,000

Sales Salaries Expense

388,800

Office Equipment

115,200

Advertising Expense

45,900

Accumulated Depreciation—Office Equipment

49,500

Depreciation Expense—Store Equipment

8,300

Store Equipment

511,500

Miscellaneous Selling Expense

2,000

Accumulated Depreciation—Store Equipment

186,700

Office Salaries Expense

77,400

Rent Expense

39,900

Accounts Payable

48,600

Insurance Expense

22,950

Salaries Payable

9,600

Depreciation Expense—Office Equipment

16,200

Note Payable (final payment due 2025)

54,000

Office Supplies Expense

1,650

Capital Stock

15,000

Miscellaneous Administrative Expense

1,900

Retained Earnings

253,800

Dividends

125,000

Interest Expense

12,000

(Warren 166)

Warren, Carl S. Survey of Accounting, 6th Edition. Cengage Learning, 02/2012. VitalBook file.