Multiple-Step Income Statement

On March 31, 2019, the balances of the accounts appearing in the ledger of Racine Furnishings Company, a furniture wholesaler, are as follows:

Accumulated Depreciation?Building$752,800Merchandise Inventory$977,900Administrative Expenses563,150Notes Payable239,350Building2,600,100Office Supplies20,650Cash171,300Salaries Payable8,200Cost of Merchandise Sold3,891,800Sales6,674,250Interest Expense9,500Selling Expenses696,100Kathy Melman, Capital1,542,650Store Supplies85,700Kathy Melman, Drawing177,250

a.Prepare a multiple-step income statement for the year ended March 31, 2019.

Racine Furnishings CompanyIncome StatementFor the Year Ended March 31, 2019

$

Gross profit$Expenses:

$

Total expenses

$Other expense:

$

b.What is a major advantage of the multiple-step income statement over the single-step income statement?.

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