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

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 statementsdiffer.

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$1,802,400 Sales Returns and Allowances Sales Discounts Cost of Merchandise Solo Sales Salaries Expense 13,200 rance 4 Store Equipment Miscellaneous Selling Expense Office Salaries Expense Note Payable (final payment due 2016) Capital Stock Miscellaneous Administrative