Prepare a multiple-step income statement for sombrero co

Assignment Help Financial Accounting

Reference no: EM13900047

The following selected accounts and their current balances appear in the ledger of Sombrero Co. for the fiscal year ended November 30, 2006:

Cash	$ 91,800	Sales	$1,802,400
Accounts Receivable	74,400	Sales Returns and Allowances	25,200
Merchandise Inventory	120,000	Sales Discounts	13,200
Office Supplies	3,120	Cost of Merchandise Sold	1,284,000
Prepaid Insurance	8,160	Sales Salaries Expense	252,000
Office Equipment	76,800	Advertising Expense	33,960
Accumulated Depreciation-		Depreciation Expense-
Office Equipment	12,960	Store Equipment	5,520
Store Equipment	141,000	Miscellaneous Selling Expense	1,320
Accumulated Depreciation-		Office Salaries Expense	49,200
Store Equipment	58,320	Rent Expense	26,580
Accounts Payable	32,400	Insurance Expense	15,300
Salaries Payable	2,400	Depreciation Expense-
Note Payable		Office Equipment	10,800
(final payment due 2016)	36,000	Office Supplies Expense	1,080
Capital Stock	60,000	Miscellaneous Administrative
Retained Earnings	261,600	Expense	1,440
Dividends	30,000	Interest Expense	1,200

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 $3,000.

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

Reference no: EM13900047

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