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Strength-Weakness of mulit-step/single step Income Statement

Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single a single-step format. The discussion involves the following 2010 information related to Webster Company ($000 omitted).

Administrative expense $ 4,900
Officer salaries 3,960
Depreciation of office furniture and equipment 63,570
Cost of goods sold 17,230
Rental revenue
Selling expense
Transportation-out 2,690
Sales commissions 7,980
Depreciation of sales equipment 6,480
Sales 96,500
Income tax 7,580
Interest expense 1,860

Instructions:
(a) Prepare an income statement for the year 2010 using the multiple-step form. Common shares out-standing for 2010 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2010 using the single-step form.
(c) Which one do you prefer? Please discuss.

Solution Summary

The soltuon provided strengths and weaknesses of mulit-step or single step income statement.

$2.19