Problem:
The following selected accounts and their current balances appear in the ledger of Black Lab Co. for the fiscal year ended April 30, 2012:
Cash $ 42,000 Sales Returns and Allowances $ 40,000
Accounts Receivable 150,000 Sales Discounts 15,000
Merchandise Inventory 180,000 Cost of Merchandise Sold 1,855,000
Offi ce Supplies 5,000 Sales Salaries Expense 400,000
Prepaid Insurance 12,000 Advertising Expense 120,000
Offi ce Equipment 120,000 Depreciation Expense
Accumulated Depreciation Store Equipment 15,000
Offi ce Equipment 28,000 Miscellaneous Selling Expense 18,000
Store Equipment 500,000 Office Salaries Expense 240,000
Accumulated Depreciation Rent Expense 38,000
Store Equipment 87,500 Insurance Expense 24,000
Accounts Payable 48,500 Depreciation Expense
Salaries Payable 4,000 Offi ce Equipment 7,000
Note Payable Office Supplies Expense 4,000
(final payment due 2032) 140,000 Miscellaneous Administrative Exp. 6,000
Cindy Worley, Capital 386,000 Interest Expense 8,000
Cindy Worley, Drawing 45,000
Sales 3,150,000
Instructions
1. Prepare a multiple-step income statement.
2. Prepare a statement of owner s equity.
3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $7,000.
4. Briefly explain (a) how multiple step and single-step income statement differs (b) how report form and account form balance sheet differs.