The following selected accounts and their current balances appear in the ledger of Carpet Land Co. for the fiscal year ended October 31, 2012:

Instructions
1. Prepare a multiple-step income statement.
2. Prepare a retained earnings statement.
3. Prepare a report form of balances sheet, assuming that the current portion of the note payable is $16,000.
4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheetsdiffer.

Transcribed Image Text:

$274,000 Sales $6,155,000 Cash Accounts Receivable Sales Returns and Allowances 70,000 425,000 Merchandise Inventory Office Supplies Prepaid Insurance Office Equipment Sales Discounts 525,000 55,000 Cost of Merchandise Sold 12,000 3,600,000 Sales Salaries Expense Advertising Expense Depreciation Expense- 9,000 925,000 150,000 315,000 Accumulated Depreciation- Office Equipment Store Equipment Accumulated Depreciation- Store Equipment Accounts Payable 187,000 Store Equipment Miscellaneous Selling Expense Office Salaries Expense 35,000 900,000 40,000 315,000 293,000 Rent Expense 115,000 Depreciation Expense- 193,000 Salaries Payable Note Payable (final payment due 2037) Capital Stock Retained Earnings 12,000 Office Equipment Insurance Expense Office Supplies Expense Miscellaneous Administrative Exp. Interest Expense 22,000 18,000 400,000 9,000 250,000 11,000 500,000 15,000 Dividends 150,000