The following selected accounts and their current balances appear in the ledger of Prescott Inc. for the fiscal year ended September 30, 20Y8:

Instruction
1. Prepare a multiple-step income statement.
2. Prepare a statement of stockholders' equity. No common stock was issued during the year.
3. Prepare a balance sheet, assuming that the current portion of the note payable is $16,000.
4. Briefly explain how multiple-step and single-step income statements differ.

Transcribed Image Text:

Retained Earnings 2 0,000 S Salaries Expense Estimated Returns Inventory Cost of Goods Sold Advertising Expense 0,400 Depreciation Expense- Accumulated Depreciation- Miscellaneous Selling Expense ,023,000 Office Salaries Expense Accumulated Depreciation- 2 Customer Refunds Payable Salaries Payable 19,200 Office Supplies Expense Miscellaneous Administrative (final p yment due in fi e years) 108,000