P4-42A. (Learning Objectives 2, 4: Reporting comparative amounts on the Income Statement) Refer to Robert's Home Repair Services account balances for 20X4 and 20X5 in P4-41A. Suppose Robert decided to show all the accounts on its Income Statement. In addition, Robert discovered that: Supplies expense in 20X4 and 20X5 contained an item amounting to $500 in each year that is more appropriately classified as advertising expense. Other expenses in 20X4 and 20X5 contained an item amounting to $400 in each year that is more appropriately classified as motor vehicle expense. LO 24 A1 P4-41A. (Learning Objectives 2, 4: Aggregating information for presentation on the Income Statement) Robert's Home Repair Services had the following balances at the end of 20X4 and 20X5. Presentation of Financial Statements 247 2 Robert's Home Repair Services Partial Account Listing and Balances As of December 31, 20X5 and 20X4 3 Sales revenue 4 Service revenue 20X5 20X4 $ 40,800 $ 32,900 | 21,300 17,700 5 Interest income 3,300 2,900 6 Cost of goods sold 17,200 13,400 7 Wages and salaries 12,300 10,200 8 Depreciation 2,700 2,700 9 Supplies expense 8,800 7,400 10 Interest expense 600 500 11 Motor vehicle expense 4,500 3,100 12 Fuel expense 2,600 1,400 13 Utilities expense 1,100 2,500 14 Advertising expense 3,700 3,100 15 Tax expense 2,400 1,000 16 D Requirements 1. Assuming that Robert would like to disclose no more than what is required by accounting standards, with the maximum level of aggregation possible, prepare an Income Statement to such effect. 2. Why would it not be possible for Robert to simply show a three-line Income Statement. one that simply lists total revenue, total expenses, and net profit? 3. How should Robert decide which line items are important enough to be shown separately on the Income Statement and which ones to aggregate?