Two accountants for the firm of elwes and wright are arguing
Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2014 information related to P. Bride Company ($000 omitted).
|
Administrative expenses |
|
|
Officers’ salaries |
$4,900 |
|
Depreciation of office furniture and equipment |
3,960 |
|
Cost of goods sold |
60,570 |
|
Rent revenue |
17,230 |
|
Selling expenses |
|
|
Transportation-out |
2,690 |
|
Sales commissions |
7,980 |
|
Depreciation of sales equipment |
6,480 |
|
Sales |
96,500 |
|
Income tax |
9,070 |
|
Interest expense |
1,860 |
Instructions
(a) Prepare an income statement for the year 2014 using the multiple-step form. Common shares outstanding for 2014 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2014 using the single-step form. Common shares outstanding for 2014 total 40,550 (000 omitted).
(c) Which one do you prefer? Discuss.
Leave a Reply
Want to join the discussion?Feel free to contribute!