Task: (Multiple-step and Single-step)
Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting and income statement in a multiple-step versus a single-step format. The discussion involves the following 2007 information related to P. Bride Company ($000 omitted).
Administrative expense
Officer's salaries $4,900
Depreciation of office furniture and equipment $3.960
Cost of goods sold $60,570
Rental revenue $17,230
Selling expense
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
Question 1: Prepare an income statement for the year 2007 using the multiple-step form. Common shares outstanding for 2007 total 40,550 (000 omitted)
Question 2: Prepare an income statement for the year 2007 using the single-step form
Question 3: Which one do you prefer? Discuss.