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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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