(Multiple-step and Single-step) The accountant of Whitney Houston Shoe Co. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2004.
Rental revenue $ 29,000
Interest on notes payable 18,000
Market appreciation on land above cost 31,000
Wages and salaries-sales 114,800
Materials and supplies-sales 17,600
Income tax 37,400
Wages and salaries-administrative 135,900
Other administrative expenses 51,700
Cost of goods sold 496,000
Net sales 980,000
Depreciation on plant assets (70% selling, 30% administrative) 65,000
Dividends declared 16,000
There were 20,000 shares of common stock outstanding during the year.
Instructions:
(a) Prepare a multiple-step income statement.
(b) Prepare a single-step income statement.
(c) Which format do you prefer? Discuss.