2024 – Two accountants for the firm of Elwes and Wright are arguing about the merits
Two accountants for the firm of Elwes and Wright are arguing – 2024
Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2014 information related to P. Bride Company ($000 omitted).
|
Administrative expenses
|
|
|
Officers’ salaries
|
$4,900
|
|
Depreciation of office furniture and equipment
|
3,960
|
|
Cost of goods sold
|
60,570
|
|
Rent revenue
|
17,230
|
|
Selling expenses
|
|
|
Transportation-out
|
2,690
|
|
Sales commissions
|
7,980
|
|
Depreciation of sales equipment
|
6,480
|
|
Sales
|
96,500
|
|
Income tax
|
9,070
|
|
Interest expense
|
1,860
|
Instructions
(a) Prepare an income statement for the year 2014 using the multiple-step form. Common shares outstanding for 2014 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2014 using the single-step form. Common shares outstanding for 2014 total 40,550 (000 omitted).
(c) Which one do you prefer? Discuss.
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