Q1) The accountant of Whitney Houston Shoe Co. has compiled following information from company's records as a basis for income statement for year ended December 31, 2007.
Rental revenue |
$29,000 |
Interest on notes payable |
18,000 |
Market appreciation on land above cost |
31,000 |
Wages and salaries-sales |
114,800 |
Materials and supplies-sales |
17,600 |
Income tax |
37,400 |
Wages and salaries-administrative |
135,900 |
Other administrative expenses |
51,700 |
Cost of goods sold |
496,000 |
Net sales |
980,000 |
Depreciation on plant assets (70% selling, 30% administrative) |
65,000 |
Cash dividends declared |
16,000 |
There were 20,000 shares of common stock outstanding during the year.
(a) Create a multiple-step income statement.
(b) Create a single-step income statement.
(c) What format do you prefer? Explain.