The following account titles and balances were taken from the adjusted trial balance of Hogan Sales Co. at December 31, Year 2.

Required:

a. prepare a single-step income statement

b. prepare a multistep income statement

HOGAN SALES CO. CA Advertising expense Interest expense Merchandise inventory, January 1 Merchandise inventory, December 31 Miscellaneous expense Purchases Purchase returns and allowances Rent expense Salaries expense Sales Sales returns and allowances Transportation-in Transportation-out Gain on sale of land Utilities expense 20,800 10,000 36,000 40,200 1,600 300,000 5,400 36,000 106,000 640,000 16,000 12,400 21,600 8,000 22,400