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Copy of week 3 individual

Copy of week 3 individual - Individual Assignment...

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Individual Assignment: Assignments from the Text Jennifer Luttrell ACC/421
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E4-6 (a) Multiple-Step Form Whitney Houston Shoe Co. Income Statement For the Year Ended December 31, 2007 Net sales ............................................................................. $980,000 Cost of goods sold ............................................................. 496,000 Gross profit on sales ......................................................... 484,000 Operating Expenses Selling expenses Wages and salaries ................................................ $114,800 Depr. exp. (70% X $65,000) ................................. 45,500 Materials and supplies .......................................... 17,600 $177,900 Administrative expenses Wages and salaries ................................................ 135,900 Other admin. expenses ......................................... 51,700 Depr. exp. (30% X $65,000) ................................. 19,500 207,100 385,000 Income from operations ................................................... 99,000 Other Revenues and Gains Rental revenue ............................................................ 29,000 128,000 Other Expenses and Losses Interest expense ........................................................... 18,000 Income before income tax ................................................ 110,000 Income tax ................................................................... 37,400 Net income ......................................................................... $ 72,600 Earnings per share ($72,600 ÷ 20,000) ............................ $3.63 (b) Single-Step Form Whitney Houston Shoe Co. Income Statement For the Year Ended December 31, 2007 Revenues
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C: I prefer the multiple step income statement over the single step statement for the following reasons. The advantage of the multiple-step income statement is that it explicitly displays important financial and managerial information that is useful to help calculate from a single-step income statement. The single-step format has the advantage of being relatively simple to prepare and to understand.
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