Acc280 Financial Accounting: P4-1 The following selected accounts and their current (Magic Vinyl)

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Acc280 Financial Accounting

P4-1 Multiple-step Income Statement and Report Form of Balance Sheet
The following selected accounts and their current balances appear in the ledger of Magic Vinyl Co. for the fiscal year ended March 31, 2008.
Cash 184,500
Accounts receivable 145,200
Merchandise inventory 210,000
Office supplies 6,720
Prepaid insurance 4,080
Office equipment 102,000
Accum Depreciation office equip 15,360
Store equipment 183,600
Accum depreciation store equipment 41,040
Accounts payable 66,720
Salaries payable 2,880
Note payable (Final payment due 2018) 67,200
Capital Stock 75,000
Retained Earnings 489,900
Dividends 42,000
Sales 1,542,000
Sales returns and allowances 27,720
Sales discounts 26,280
Cost of merchandise sold 930,000
Sales salaries expense 207,840
Advertising expense 52,560
Depreciation expense – store equipment 7,680
Miscellaneous selling expense 1,920
Office salaries expense 100,980
Rent expense 37,620
Depreciation expense office equipment 15,240
Insurance Expense 4,680
Office supplies expense 1,560
Miscellaneous administrative expense 1,920
Interest expense 6,000

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 $ 9,000.
4. Briefly explain (a) how multiple steps and single step income statements differ and (b) how report – form and account form balance sheets differ.
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