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The following selected accounts and their current balances appear in

Multiple-step income statement and report form of balance sheet

The following selected accounts and their current balances appear in the ledger of Aqua Co. for the fiscal year ended June 30, 2013:

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Cash $ 83,500 Sales $3,625,000

Accounts Receivable 150,000 Sales Returns and Allowances 37,800

Merchandise Inventory 380,000 Sales Discounts 20,200

Office Supplies 15,000 Cost of Merchandise Sold 2,175,000

Prepaid Insurance 12,000 Sales Salaries Expense 388,800

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Office Equipment 115,200 Advertising Expense 45,900

Accumulated Depreciation— Depreciation Expense—

Office Equipment 49,500 Store Equipment 8,300

Store Equipment 511,500 Miscellaneous Selling Expense 2,000

Accumulated Depreciation— Office Salaries Expense 77,400

Store Equipment 186,700 Rent Expense 39,900

Accounts Payable 48,600 Insurance Expense 22,950

Salaries Payable 9,600 Depreciation Expense—

Note Payable Office Equipment 16,200

(final payment due 2025) 54,000 Office Supplies Expense 1,650

Capital Stock 15,000 Miscellaneous Administrative

Retained Earnings 253,800 Expense 1,900

Dividends 125,000 Interest Expense 12,000

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 $8,000.

4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheets differ.

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