(Multiple-step and Single-step) The accountant of Whitney Houston Shoe Co. has compiled the following information from the company’s records as a basis for an income statement for the year ended December 31, 2004.

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.

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Rental revenue Interest on notes payable Market appreciation on land above cost Wages and salaries-sales Materials and supplies-sales Income tax $ 29,000 18,000 31,000 114,800 17,600 37,400 Wages and salaries-administrative Other administrative expenses Cost of goods sold Net sales Depreciation on plant assets (70% selling, 30% administrative) Dividends declared 135,900 51,700 496,000 980,000 65,000 16,000