Response to the following problem:
On October 31, 2016, the balances of the accounts appearing in the ledger of Prestige Furnishings Company, a furniture wholesaler, are as follows:
| Accumulated Depreciation-Building |
$ 750,000 |
| Administrative Expenses |
540,000 |
| Building |
2,500,000 |
| Cash |
175,000 |
| Common Stock |
300,000 |
| Cost of Merchandise Sold |
3,800,000 |
| Dividends |
175,000 |
| Interest Expense |
10,000 |
| Merchandise Inventory |
980,000 |
| Notes Payable |
250,000 |
| Office Supplies |
20,000 |
| Retained Earnings |
1,287,000 |
| Salaries Payable |
8,000 |
| Sales |
6,410,000 |
| Selling Expenses |
715,000 |
| Store Supplies |
90,000 |
Required:
A.Prepare a multiple-step income statement for the year ended October 31, 2016. Be sure to complete the statement heading. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.
B.What is a major advantage of the multiple-step income statement over the single-step income statement?