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.

Answer 1

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