Question 2

An alphabetical list of Wildhorses Company's adjusted accounts at its fiscal year end, August 31, 2017, follows. All accounts have normal balances.

Accounts payable		$15,580		Notes payable		$42,000
Accumulated depreciationequipment		14,000		Prepaid insurance		575
Accumulated depreciationfurniture		17,500		R. Smistad, capital		65,750
Cash		19,750		R. Smistad, drawings		77,000
Cost of goods sold		272,400		Rent expense		24,000
Depreciation expense		7,050		Salaries expense		51,000
Equipment		35,000		Salaries payable		2,250
Furniture		42,600		Sales		469,000
Insurance expense		3,575		Sales returns and allowances		16,300
Interest expense		2,110		Supplies		950
Interest payable		605		Supplies expense		6,325
Merchandise inventory		70,650		Unearned revenue		2,600

Additional information: 1. Of the notes payable, $6,900 becomes due on February 17, 2018. The balance is due in 2019. 2. On July 18, 2017, R. Smistad invested $4,500 cash in the business.

Prepare a multiple-step income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)