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    This post discusses the Weatherspoon Shoe Co. exercise.

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    The accountant of Weatherspoon 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, 2010.

    Rental revenue $29,000
    Interest expense 18,000
    Market appreciation on land above cost 31,000
    Wages and salaries-sales 114,800
    Materials and supplies-sales 17,600
    Income tax 30,600
    Wages and salaries-administrative 135,900
    Other administrative expense 51,700
    Cost of goods sold 516,000
    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.

    Which format do you prefer? The multiple-step form or the single-step form. Discuss.

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    Solution Preview

    I prefer the single-step income statement. The single-step income statement has a few advantages that the multiple-step statement doesn't, which oftentimes makes it a preferable method. The main advantage is that the single-step ...

    Solution Summary

    The solution answers the following question for the Weatherspoon Shoe Co. case:

    Which format do you prefer? The multiple-step form or the single-step form. Discuss.

    $2.19

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