Question

Two accountants for the accounting firm of Mack and Byner are arguing about the merits of presenting an income statement in a multiple-step versus a single step format. The discussion involves the following information related to Fontenot Company for the current year ($000 omitted). S6,860 5,544 84,798 24.122 Administrative expense Officers' salaries Depreciation of office furniture Cost of goods sold Rental revenue Selling expense Transportation-out Sales commissions Depreciation of sales equipment Sales Income tax Interest expense 3,766 11,172 9,072 135,100 12,698 2,604 Required: (a) Prepare an income statement for the current year using the single-step form. Average common shares outstanding were 40,550 (000 omitted). (by Prepare an income statement for the current year using the multiple-step (c) Which one do you prefer? Explain.
please prepare single step and multiple step income statements in a typed format

Answer 1

	INCOME STATEMENT
	SINGLE STEP
		AMOUNT
	Revenue & Gains
	Sales	$     1,35,100
	Rental Revenue	$         24,122
	Total revenue and Gain	$     1,59,222
	Expenses & Losses
	Cost of Goods Sold	$         84,798
	Offcer's Salary	$           6,860
	Depreciation of office furniture	$           5,544
	Transportation out	$           3,766
	Sales Commissions	$         11,172
	Depreciation on sales equipment	$           9,072
	Interest Expenses	$           2,604
	Total Expenses and losses	$     1,23,816
	Net Income	$         35,406
	Less: Income taxes	$         12,698
	Net income avaialble for shareholder	$         22,708
	Divide by average common shares outstanding	40550
	Earning per shares	$              0.56
	INCOME STATEMENT
	IN MULTIPLE STEP FORM
	Particulars	Amount	Amount
	Sales Revenue	$     1,35,100
	Less: Sales ReturnS	$                  -
			$    1,35,100
	Less : Cost of Goods Sold		$        84,798
	Gross Profit		$        50,302
	Less : Operating Expenses
	Offcer's Salary	$           6,860
	Depreciation of office furniture	$           5,544
	Transportation out	$           3,766
	Sales Commissions	$         11,172
	Depreciation on sales equipment	$           9,072
	Operating Income		$        36,414
	Income from operation		$        13,888
	Non- Operarting and others
	Rental Revenue	$         24,122
	Interest Expenses	$          -2,604
			$        21,518
	Net Income before Taxes		$        35,406
	Less: Income taxes		$        12,698
	Net income avaialble for shareholder		$        22,708
	Divide by average common shares outstanding		40550
	Earning per shares		$            0.56