(Multiple-step and Single-step) Two accountants for the firm of Elwes and Wright are arguing about the merits...

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(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 2004 information related to P. Bride Company ($000 omitted).

(a) Prepare an income statement for the year 2004 using the multiple-step form. Common shares outstanding for 2004 total 40,550 (000 omitted).

(b) Prepare an income statement for the year 2004 using the single-step form.

(c) Which one do you prefer? Discuss.

Administrative expense

Officers’ salaries                                                                                 $ 4,900

Depreciation of office furniture and equipment                              3,960

Cost of goods sold                                                                               60,570

Rental revenue                                                                                     17,230

Selling expense

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

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing...
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Intermediate Accounting

ISBN: 978-0470423684

13th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield

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