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 31,2007.
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
Cash Dividends declared $16,000
There were 20,000 shares of common stock outstanding during the year.
(a) Prepare a multiple-step income statement
(b) Prepare a single-step income statement
(c) Which format do you prefer? Discuss
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