Two accountants for the firm of Allen 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 2012 information related to Webster Company.
- Administrative expense
- Officer's salaries $ 5,320
- Depreciation of office furniture and equipment 4,460
- Cost of goods sold 60,950
- Rental revenue 18,060
- Selling expense
- Transportation-out 2,690
- Sales commissions 7,980
- Depreciation of sales equipment 6,480
- Sales 97,620
- Income tax 9,070
- Interest expense 1,860
(a) Prepare an income statement for the year 2012 using the multiple-step form. Common shares outstanding for 2012 total 40,550