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	$1,549		Interest expense	$1,397
Commissions expense	2,234		Interest revenue	1,343
Cost of goods sold	29,283		Rent revenue	7,045
Depreciation expense - office building	3,049		Salaries and wages expenseoffice	11,456
Income tax expense	1,484		Sales revenue	48,131
Insurance expense - salespersons auto	2,141		Supplies expenseoffice	803

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
		$fill in the blank 3477caf6502603a_2
		fill in the blank 3477caf6502603a_4
			$fill in the blank 3477caf6502603a_6
Operating expenses:
Selling expenses:
	$fill in the blank 3477caf6502603a_8
	fill in the blank 3477caf6502603a_10
	fill in the blank 3477caf6502603a_12
Total selling expenses		$fill in the blank 3477caf6502603a_13
General and administrative expenses:
	$fill in the blank 3477caf6502603a_15
	fill in the blank 3477caf6502603a_17
	fill in the blank 3477caf6502603a_19
Total general and administrative expenses		fill in the blank 3477caf6502603a_20
Total operating expenses			fill in the blank 3477caf6502603a_21
			$fill in the blank 3477caf6502603a_23
Other revenues and expenses:
		$fill in the blank 3477caf6502603a_25
		fill in the blank 3477caf6502603a_27
		fill in the blank 3477caf6502603a_29
Excess of other revenues over other expenses			fill in the blank 3477caf6502603a_30
			$fill in the blank 3477caf6502603a_32
			fill in the blank 3477caf6502603a_34
			$fill in the blank 3477caf6502603a_36

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

3. Compute Shaw's profit margin. Round your answer to one decimal place. fill in the blank b1e25dfda03f050_2 %

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