Sales and purchase-related transactions using perpetual inventory system

The following were selected from among the transactions completed by Essex Company during July of the current year. Essex uses the net method under a perpetual inventory system.

July 3.	Purchased merchandise on account from Hamling Co., list price $83,000, trade discount 20%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $960 added to the invoice.
5.	Purchased merchandise on account from Kester Co., $49,050, terms FOB destination, 2/10, n/30.
6.	Sold merchandise on account to Parsley Co., $15,280, terms n/15. The cost of the goods sold was $8,470.
7.	Returned merchandise with an invoice amount of $14,400 purchased on July 5 from Kester Co.
13.	Paid Hamling Co. on account for purchase of July 3.
15.	Paid Kester Co. on account for purchase of July 5, less return of July 7.
21.	Received cash on account from sale of July 6 to Parsley Co.
21.	Sold merchandise on MasterCard, $231,230. The cost of the goods sold was $132,220.
22.	Sold merchandise on account to Tabor Co., $56,300, terms 2/10, n/30. The cost of the goods sold was $33,120.
23.	Sold merchandise for cash, $34,220. The cost of the goods sold was $24,720.
28.	Paid Parsley Co. a cash refund of $6,020 for returned merchandise from sale of July 6. The cost of the returned merchandise was $3,230.
31.	Paid MasterCard service fee of $3,240.

Required:

Journalize the transactions. If an amount box does not require an entry, leave it blank.

2.

1. eBook

   Print Item

   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	$127,100		Retained Earnings	$560,100
   Accounts Receivable	344,900		Dividends	76,100
   Inventory	386,300		Sales	4,654,900
   Estimated Returns Inventory	5,000		Cost of Goods Sold	2,692,500
   Office Supplies	12,000		Sales Salaries Expense	757,100
   Prepaid Insurance	9,300		Advertising Expense	208,200
   Office Equipment	279,700		Depreciation Expense Store Equipment	40,600
   Accumulated Depreciation Office Equipment	190,100		Miscellaneous Selling Expense	17,800
   Store Equipment	873,000		Office Salaries Expense	413,300
   Accumulated Depreciation Store Equipment	279,700		Rent Expense	61,000
   Accounts Payable	193,500		Depreciation Expense Office Equipment	30,500
   Customer Refunds Payable	10,000		Insurance Expense	18,900
   Salaries Payable	12,400		Office Supplies Expense	11,200
   Note Payable (final payment due 2024)	407,500		Miscellaneous Administrative Exp.	8,100
   Common Stock	76,800		Interest Expense	12,400

   Required:

   1. Prepare a multiple-step income statement.

   Kanpur Co. Income Statement For the Year Ended June 30, 20Y7
   CashInventoryPrepaid insuranceSales discountsSales			$fill in the blank 2
   Accounts payableCost of goods soldInsurance expenseInventoryStore Equipment			fill in the blank 4
   Accounts payableGross profitOperating incomeNet incomeNet sales			$fill in the blank 6
   Expenses:
   Selling expenses:
   Cost of goods soldNet salesOffice suppliesSales discountsSales salaries expense	$fill in the blank 8
   Accounts payableAdvertising expenseCashDepreciation expense-office equipmentSales returns and allowances	fill in the blank 10
   Accounts receivableAccumulated depreciation-store equipmentCommon stockDepreciation expense-store equipmentStore equipment	fill in the blank 12
   Cost of goods soldMiscellaneous selling expenseOffice equipmentOffice salaries expenseSales	fill in the blank 14
   Total selling expenses		$fill in the blank 15
   Administrative expenses:
   Common stockInventoryOffice salaries expenseOffice suppliesSales	$fill in the blank 17
   Accounts payableAccounts receivableNotes payableRent expenseSales returns and allowances	fill in the blank 19
   Accounts payableCashInsurance expensePrepaid insuranceSales discounts	fill in the blank 21
   Accumulated depreciation-office equipmentCashDepreciation expense-office equipmentOffice equipmentOffice supplies	fill in the blank 23
   Accounts payableOffice equipmentOffice supplies expenseOffice suppliesSales returns and allowances	fill in the blank 25
   Accounts receivableInterest expenseMiscellaneous administrative expenseNotes payableSales	fill in the blank 27
   Total administrative expenses		fill in the blank 28
   Total operating expenses			fill in the blank 29
   Gross profitOperating incomeLoss from operationsNet incomeNet loss			$fill in the blank 31
   Cost of goods soldGross profit:Net sales:Other revenue and expense:Other income:
   Advertising expenseInterest expenseMiscellaneous selling expenseOffice supplies expenseSales discounts			fill in the blank 34
   Gross profitOperating incomeLoss from operationsNet incomeNet loss			$fill in the blank 36

   2. Prepare a statement of stockholders equity. Additional common stock of $7,500 was issued during the year ended June 30, 20Y7.

   Kanpur Co. Statement of Stockholders Equity For the Year Ended June 30, 20Y7
   	Common Stock	Retained Earnings	Total
   Balances, July 1, 20Y6Balances, June 30, 20Y7DividendsIssued common stockNet incomeNet loss	$fill in the blank 38	$fill in the blank 39	$fill in the blank 40
   Balances, July 1, 20Y6Balances, June 30, 20Y7DividendsIssued common stockNet incomeNet loss	fill in the blank 42		fill in the blank 43
   Balances, July 1, 20Y6Balances, June 30, 20Y7DividendsIssued common stockNet incomeNet loss		fill in the blank 45	fill in the blank 46
   Balances, July 1, 20Y6Balances, June 30, 20Y7DividendsIssued common stockNet incomeNet loss		fill in the blank 48	fill in the blank 49
   Balances, July 1, 20Y6Balances, June 30, 20Y7DividendsIssued common stockNet incomeNet loss	$fill in the blank 51	$fill in the blank 52	$fill in the blank 53

   3. Prepare a balance sheet, assuming that the current portion of the note payable is $20,375.

   KANPUR CO. Balance Sheet June 30, 20Y7
   Assets
   Current assets:
   Accounts payableCashOffice equipmentRent expenseSales		$fill in the blank 55
   Accounts payableAccounts receivableCommon stockInterest expenseStore equipment		fill in the blank 57
   Accumulated depreciationInterest expenseInventoryNote payableSales returns and allowances		fill in the blank 59
   Estimated returns inventoryOffice equipmentOffice supplies expenseOffice suppliesSales discounts		fill in the blank 61
   Common stockOffice equipmentOffice supplies expenseOffice suppliesSales discounts		fill in the blank 63
   Accounts payableCost of goods soldInsurance expenseNote payablePrepaid insurance		fill in the blank 65
   Total current assets			$fill in the blank 66
   Property, plant, and equipment:
   Accounts receivableCashOffice equipmentOffice supplies expenseOffice supplies	$fill in the blank 68
   Accounts payableAccumulated depreciation-office equipmentCashDepreciation expenseRent expense	fill in the blank 70
   Accounts payableBook value-office equipmentCashDepreciation expenseRent expense		$fill in the blank 72
   CashCost of goods soldPrepaid insuranceSalaries payableStore equipment	$fill in the blank 74
   Accumulated depreciation-store equipmentDepreciation expenseInventorySales discountsStore equipment	fill in the blank 76
   Book value-store equipmentDepreciation expenseInventorySales discountsStore equipment		fill in the blank 78
   Total property, plant, and equipment			fill in the blank 79
   Total assets			$fill in the blank 80
   Liabilities
   Current liabilities:
   Accounts payableAccounts receivableCashPrepaid insuranceSales returns and allowances		$fill in the blank 82
   Accumulated depreciationOffice salaries expenseOffice suppliesSalaries payableSales salaries expense		fill in the blank 84
   Customer refunds payableInventoryNote payable (current portion)Office equipmentSales		fill in the blank 86
   Cost of goods soldInventoryNote payable (current portion)Office equipmentSales		fill in the blank 88
   Total current liabilities			$fill in the blank 89
   Long-term liabilities:
   CashNote payable (long-term portion)Office equipmentPrepaid insuranceSales			fill in the blank 91
   Total liabilities			$fill in the blank 92
   Stockholders' equity
   Accounts receivableCommon stockCashPrepaid insuranceSales		$fill in the blank 94
   Accounts receivableCashRetained earningsSalaries payableSales		fill in the blank 96
   Total stockholders' equity			fill in the blank 97
   Total liabilities and stockholders' equity			$fill in the blank 98

   4. Which type of income statement shows intermediate balances?

   Multiple-stepSingle-step