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 2008 information related to P. Bride Company ($000 omitted).

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

Instructions

(a) Prepare an income statement for the year 2008 using the multiple-step form. Common shares outstanding for 2008 total 40,550 (000 omitted).

(b) Prepare an income statement for the year 2008 using the single-step form.

(c) Which one do you prefer? Discuss.