Question - Multiple-step and Single-step
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 2010 information related to Webster Company ($000 omitted).
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Administrative expense
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|
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Officer's salaries
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$ 5,570
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Depreciation of office furniture and equipment
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4,560
|
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Cost of goods sold
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61,240
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Rental revenue
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22,450
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Selling expense
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|
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Transportation-out
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2,690
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Sales commissions
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7,980
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Depreciation of sales equipment
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6,480
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Sales
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97,070
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Income tax
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9,070
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Interest expense
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1,860
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(a) Prepare an income statement for the year 2010 using the multiple-step form. Common shares outstanding for 2010 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2010 using the single-step form.