Question
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
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 | $ 300,000 |
Administrative Expenses | 216,000 |
Building | 1,000,000 |
Cash | 70,000 |
Cost of Merchandise Sold | 1,520,000 |
Interest Expense | 4,000 |
Kathy Melman, Capital | 634,800 |
Kathy Melman, Drawing | 70,000 |
Merchandise Inventory | $ 392,000 |
Notes Payable | 100,000 |
Office Supplies | 8,000 |
Salaries Payable | 3,200 |
Sales | 2,564,000 |
Selling Expenses | 286,000 |
Store Supplies | 36,000 |
Required: | |
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a. | Prepare a multiple-step income statement for the year ended March 31, 2019. Be sure to complete the heading of the statement. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. |
b. | What is a major advantage of the multiple-step income statement over the single-step income statement? |
Labels | |
For the Year Ended March 31, 2019 | |
March 31, 2019 | |
Operating expenses | |
Other revenue and expense | |
Amount Descriptions | |
Gross profit | |
Income from operations | |
Net income | |
Net loss | |
Total assets | |
Total liabilities | |
Total operating expenses | |
Total owners equity |
Prepare a multiple-step income statement for the year ended March 31, 2019. Be sure to complete the heading of the statement. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.
Racine Furnishings Company |
Income Statement |
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What is a major advantage of the multiple-step income statement over the single-step income statement?
The multiple-step income statement clearly presents the value of total revenues.
The multiple-step income statement clearly presents the value of total expenses.
The multiple-step income statement shows the relationship of gross profit to sales.
The multiple-step income statement is less complex to prepare.
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