Multiple-step income statement and balance sheet The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 20Y7: Cash $92,000
Retained Earnings $381,000
Accounts Receivable 450,000
Dividends 300,000
Inventory 370,000
Sales 8,925,000
Estimated Returns Inventory 5,000
Cost of Goods Sold 5,620,000
Office Supplies 10,000
Sales Salaries Expense 850,000
Prepaid Insurance 12,000
Advertising Expense 420,000
Office Equipment 220,000
Depreciation Expense—Store Equipment 33,000
Accumulated Depreciation—Office Equipment 58,000
Miscellaneous Selling Expense 18,000
Store Equipment 650,000
Office Salaries Expense 540,000
Accumulated Depreciation—Store Equipment 87,500
Rent Expense 48,000
Accounts Payable 38,500
Insurance Expense 24,000
Customers Refunds Payable 10,000
Depreciation Expense—Office Equipment 10,000
Salaries Payable 4,000
Office Supplies Expense 4,000
Note Payable (final payment due 2034) 140,000
Miscellaneous Administrative Exp. 6,000
Common Stock 50,000
Interest Expense 12,000

Required:
a. Prepare a multiple-step income statement.
b. Prepare a retained earnings statement.

Net Profit     1345,000

Retained Earnings  $ 1426,000

Explanation:

The multi step income statement  shows the sections of the income statement separately such as the operating expenses and non operating expenses .

Kanpur Co.

Multi step Income Statement

For year ended June 30, 20Y7:

Sales 8,925,000

Cost of Goods Sold 5,620,000

Estimated Returns Inventory (5,000)

Adjusted Cost OF Goods Sold  5,615,000

Gross Profit  $ 3310,000

Less Operating Expenses

Rent Expense 48,000

Selling And Administrative Expenses

Office Supplies Expense 4,000

Sales Salaries Expense 850,000

Miscellaneous Selling Expense 18,000

Depreciation Expense—Store Equipment 33,000

Office Salaries Expense 540,000

Depreciation Expense—Office Equipment 10,000

Advertising Expense 420,000

Miscellaneous Administrative Exp. 6,000

Total Operating Expenses   1881,000

Operating Income                      1381,000

Other Expense

Insurance Expense 24,000

Interest Expense 12,000

Total Non Operating Expenses  36,000

Net Profit     1345,000

Kanpur Co.

Statement of Retained Earnings

For year ended June 30, 20Y7:

Retained Earnings $381,000

Add Net Profits     1345,000

Less Dividends 300,000

Retained Earnings For year ended June 30, 20Y7  $ 1426,000

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