Question - Multiple step income statement
On Oct. 31, 2016 the balances of the accounts appearing in the ledger of Prestige Furnishings Co. a furniture wholesaler, are as follows:
accumulated Depreciation bldg. $750,000 Merchandise Inventory $980,000
administrative expenses $540,000 notes payable $250,000
building $2,500,000 office supplies $20,000
cash $175,000 salaries payable $8,000
cost of merchandise sold $3,800,000 sales $6,410,000
interest expense $10,000 selling expenses $715,000
Jan Brown, capital $1,587,000 store supplies $90,000
Jan Brown, Drawing $175,000
a) Prepare a multiple step income statement for the year ended Oct 31, 2016.
b) Compare the major advantages and disadvantages of the multiple step and single step forms of income statements.