E4-5 Two accountants for the firm of Elwes and Wright are arguing about the merits of presenti
Question # 00084131
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Updated on: 07/23/2015 01:31 AM Due on: 07/23/2015
E4-5 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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Rating:
/5
Solution: E4-5 Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income