1. Multiple-Step Income Statement and Profit Margin

   The following income statement items, arranged in alphabetical order, are taken from the records of Shaw Corporation for the current year:

   Advertising expense	$1,500		Interest expense	$1,410
   Commissions expense	2,652		Interest revenue	1,412
   Cost of goods sold	29,269		Rent revenue	6,551
   Depreciation expense - office building	2,760		Salaries and wages expenseoffice	11,508
   Income tax expense	1,499		Sales revenue	48,090
   Insurance expense - salespersons auto	2,232		Supplies expenseoffice	809

   Required:

   Assume that Shaw Corporation classifies all operating expenses into two categories: (1) selling and (2) general and administrative.

   1. Prepare a multiple-step income statement for the current year.

   Shaw Corporation
   Income Statement
   For the Current Year
   		$
   			$
   Operating expenses:
   Selling expenses:
   	$
   Total selling expenses		$
   General and administrative expenses:
   	$
   Total general and administrative expenses
   Total operating expenses
   			$
   Other revenues and expenses:
   		$
   Excess of other revenues over other expenses
   			$
   			$

   2. What advantage do you see in multi-step income statement?

   3. Compute Shaw's profit margin. Round your answer to one decimal place. %

   4. Reflect on the profit margin determined above. What does this mean?