Prepare a multiple-step income statement of Ocean City

Reference no: EM132641436

Question - The trial balance of Ocean City Ltd. contained the following accounts at June 30, the end of the company's fiscal year.

Ocean City Ltd. Trial Balance June 30, 2020

Accounts Payable 50,500

Capital 215,000

Drawing 22,000

Sales 950,000

Sales Returns and Allowances 8.800

Freight out 200

Delivery Expense 16,300

Rent Expense 24,400

Advertising Expense 24,800

Prepaid Insurance 31,100

Unearned Service Revenue 10,000

Cost of Goods Sold 595,000

Salaries Expense 235,000

Notes Payable 51,000

Store Supplies 10,200

Cash 28,700

Accounts Receivable 1,30,700

Merchandise Inventory 44,700

Store Equipment 80,000

Accumulated Depreciation-Store Equipment 22,000

Delivery Equipment 53,000

Accumulated Depreciation-Delivery Equipment 6,000

Totals 13, 04,700 13,04,700

Adjustment data:

1. A of count of supplies on hand totaled Tk. 3,700.

2. Depreciation is Tk. 7,000 on the store equipment.

3. June 30 was a Sunday; employees are paid on Friday; Ocean City Ltd. has ten employees, who are paid Tk. 3500 each for 5-day work week.

4. Invoices representing Tk. 40,000 of sales during the year have not been recorded as of June 30.

5. Rent expense has been accrued a total of Tk. 15,000.

6. Insurance expires at the rate of Tk. 300 per month.

7. Unearned service revenue has been earned of Tk. 3000 during the year.

Instructions -

(a) Prepare a multiple-step income statement of Ocean City.

(b) An owner's equity statement for the year.

(d) Show your arguments for preparing the financial statements of a firm.

Reference no: EM132641436

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