1. Prepare a multiple-step income statement. Be sure to complete the statement heading. Refer to the account names in the instructions and the lists of Labels and Amount Descriptions for the exact wording of text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. A colon (:) will automatically appear if it is required.

The following selected accounts and their current balances appear in the ledger of Druid Hills Co. for the fiscal year ended May 31, 20Y8:

Cash	$232,700
Accounts Receivable	957,000
Merchandise Inventory	1,668,600
Office Supplies	11,800
Prepaid Insurance	7,100
Office Equipment	827,000
Accumulated Depreciation-Office Equipment	547,000
Store Equipment	3,606,000
Accumulated Depreciation-Store Equipment	1,814,800
Accounts Payable	373,100
Customer Refunds Payable	48,500
Salaries Payable	37,500
Note Payable*	310,000
Kristina Marble, Capital	3,281,300
Kristina Marble, Drawing	107,900
Sales	11,377,100
Cost of Merchandise Sold	7,851,600
Sales Salaries Expense	904,000
Advertising Expense	554,400
Depreciation Expense-Store Equipment	132,100
Miscellaneous Selling Expense	39,000
Office Salaries Expense	654,000
Rent Expense	88,900
Depreciation Expense-Office Equipment	45,000
Insurance Expense	41,000
Office Supplies Expense	35,100
Miscellaneous Administrative Expense	10,400
Interest Expense	15,700
*final payment due in 10 years

	Required:
1.	Prepare a multiple-step income statement.*
2.	Prepare a statement of owners equity.*
3.	Prepare a balance sheet, assuming that the current portion of the note payable is $53,700.*
4.	How multiple-step and single-step income statements differ.

*Be sure to read the instructions for each financial statement carefully.

X

Labels and Amount Descriptions

Labels
Current assets
Current liabilities
For the Year Ended May 31, 20Y8
Long-term liabilities
May 31, 20Y8
Expenses
Other revenue and expense
Property, plant, and equipment
Amount Descriptions
Gross profit
Income from operations
Increase in owners equity
Kristina Marble, capital, June 1, 20Y7
Kristina Marble, capital, May 31, 20Y8
Withdrawals
Net income
Net loss
Total administrative expenses
Total assets
Total current assets
Total current liabilities
Total liabilities
Total liabilities and owners equity
Total operating expenses
Total property, plant, and equipment
Total selling expenses

X

Income Statement

1. Prepare a multiple-step income statement. Be sure to complete the statement heading. Refer to the account names in the instructions and the lists of Labels and Amount Descriptions for the exact wording of text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. A colon (:) will automatically appear if it is required.

2. Prepare a statement of owners equity. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of text entries. Enter amounts that represent reduction as negative numbers using a minus sign. Statement of Owners EquityX

3. Prepare a balance sheet, assuming that the current portion of the note payable is $53,700. Be sure to complete the statement heading. Refer to the account names in the instructions and the lists of Labels and Amount Descriptions for the exact wording of text entries. Order the Property, Plant & Equipment accounts in the order shown on the Instructions page. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. Enter all amounts as positive numbers.

4. How multiple-step and single-step income statements differ.

Which type of income statement shows intermediate balances?