The accountant of Latifa Shoe Co. has piled the following information from the company’s records as a basis for an income statement for the year ended December 31, 2020.

Rent revenue...............................................................................................$ 29,000
Interest expense............................................................................................18,000
Market appreciation on land above cost....................................................31,000
Salaries and wages expense (selling)........................................................114,800
Supplies (selling).............................................................................................17,600
Income tax.......................................................................................................23,100
Salaries and wages expense (administrative)...........................................135,900
Other administrative expenses....................................................................51,700
Cost of goods sold........................................................................................496,000
Net sales........................................................................................................980,000
Depreciation on plant assets (70% selling, 30% administrative)..............65,000
Cash dividends declared...............................................................................16,000

There were 20,000 shares of common stock outstanding during the year.

Instructions

a. Prepare a multiple-step income statement.

b. Prepare a single-step income statement.

c. Which format do you prefer? Discuss.