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Two accountants for the firm of elwes and wright

17/11/2020 Client: arwaabdullah Deadline: 24 Hours

E4-5 (Multiple-Step and Single-Step) 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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