The account balances for Atlantis Aquatics, Inc., for the year ended December 31, 2010, are presented next in random order:

Requirements 1. Prepare Atlantis Aquatics’ single-step income statement.
2. Would you recommend the use of the single-step income statement format by a merchandiser? Why?

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Cash.. Equipment... $ 3,700 13,700 Accounts Payable.. 4,500 Common Stock. 35,000 Cost of Goods Sold..... Accumulated Depreciation, Equipment... Unearned Revenues $136,400 6,100 1,900 Long-Term Notes Payable.. 10,000 Sales Revenue..... 243,500 General Expenses... 18,200 Accounts Receivable. 3,200 Wages Payable. 1,100 Accumulated Depreciation, Supplies 900 Building.... 18,500 Building.. 125,000 Mortgage Payable Sales Returns and (Long-Term) 37,000 Allowances 4,800 Dividends... 34,000 Prepaid Rent 800 Sales Discounts 2,200 Retained Earnings.. 13,800 Selling Expenses. 26,800 Inventory................... 1,700