Company XYZ had the following information during 2020:

1. Beginning inventory was $50,000. Purchases of inventory was $20,000. Ending inventory was 35% of beginning inventory at the end of the year.
2. Cash on hand was $325,000.
3. Sales revenue was $225,000.
4. Operating expenses were half of cost of goods sold.
5. Income tax rate was 20%.

Prepare an income statement for 2020 using the (1) single-step approach and (2) multiple-step approach. What are the advantages and disadvantages of each?