1. Use the data of Problem 5-14A to prepare Anarel Distributors' multi-step income statement for the year ended May 31, 2014.

2. Corry Anarel, owner of the company, strives to earn a gross margin of at least 50 percent and a net income of 20 percent (Net income percentage = Net income, Net sales revenue). Did Anarel Distributors achieve these goals? Show your calculations.

In problem 5-14A

Items from the accounts of Anarel Distributors at May 31, 2014, follow, listed in alphabetical order. For simplicity, all operating expenses are summarized in the General Expenses account and the Selling Expenses account.

Required
1. Prepare the business’s single-step income statement for the year ended May 31, 2014.
A physical count of inventory on May 31, 2014, valued it at $167,100.
2. Prepare Anarel Distributors’ statement of owner’s equity at May 31, 2014.
3. Prepare Anarel Distributors’ classified balance sheet in report format at May 31, 2014.

$ 71,000 Accounts Payable. Accounts Receivable. Interest Revenue. 600 107,500 Inventory May 31, 2013.. Notes Payable, Long-Term.. Purchases... Salaries Payable. 151,800 Accumulated Amortization- 96,900 Equipment C. Anarel, Capital. C. Anarel, Withdrawals.. 114,800 1,102,200 7,200 26,500 167,800 66,900 19,900 340,800 206,800 9,200 Sales Revenue. 2,800 Selling Expenses. Cash. Sales Discounts. Equipment. General Expenses. Interest Expense. Interest Payable . Sales Returns and Allowances. 45,900 1,991,500 357,200 33,100 Supplies. Unearned Sales Revenue 15,200