The following selected accounts and their current balances appear in the ledger of Prescott Inc. for the fiscal year ended September 30, 20Y8. Cash $167,000 Retained Earnings- $507,600 Accounts Receivable- 300,000 Dividends- 250,000 Inventory- 735,000 Sales- 250,000 Estimated Returns Inventory- 25,000 Cost of Goods sold- 7,134,000 Office Supplies- 30,000 Sales Salary Expense- 4,350,000 Pre Paid Insurance- 24,000 Advertising Expense- 91,800 Office Equipment Accumulated Depreciation- 230,400 Advertising Expense Depreciation Equipment- 91,800 Office Equipment- 99,000 Store Equipment- 16,600 Store Equipment Accumulated Depreciation- 1,023,000 Miscellaneous Selling Expense- 4,000 Office Salary Expense- 154,800 Store Equipment- 373,400 Rent Expense- 79,800 Accounts Payable- 67,000 Insurance Expense- 45,900 Customers Refunds Payable- 30,200 Depreciation Expense- Office Equipment- 32,400 Salaries Payable- 19,200 Office Supplies Expense- 3,300 Note Payable- (final payment due in five years) - 108,000 Miscellaneous Administartive Expense- 3,800 Common Stock- 30,000 Interest Expense- 24,000

Instructions

1. Prepare a multiple-step income statement

2. Prepare a statement of stockholders equity. No common stock was issued during the year.

3. Prepare a balance sheet, assuming that the current portion of the note payable is $16,000.

4. Briefly explain how multiple-step and single-step income statements differ.