Prepare a multiple-step income statement for the year

Question

On August 31, 2008, the balances of the accounts appearing inthe ledger of The Bent Needle Company, a furniture wholesaler, areas follows:

AdministrativeExpenses                   $125,000

Building                                        512,500

Cash                                           48,500

Cost of MerchandiseSold                  700,000

Interest Expense                            7,500

CapitalStock                                 568,580

Dividends                                     25,000

MerchandiseInventory                     130,000

NotesPayable                                 25,000

OfficeSupplies                                10,600

SalariesPayable                               3,220

Sales                                           1,275,000

SalesDiscounts                               20,000

Sales Returns andAllowances            80,000

SellingExpenses                               205,000

StoreSupplies                                    7,700

1. Prepare a multiple-step income statement for the year ended August 31, 2008.
2. Compare the major advantages and disadvantages of themultiple-step and single-step form of incomestatements.