The following income statement items, arranged in alphabetical order, are taken from the records of Shaw Corporation for the current year: $1,554 Interest expense 2,222 Interest revenue Rent revenue Advertising expense Commissions expense Cost of goods sold Depreciation expense - office building Income tax expense Insurance expense - salesperson's auto Required: 29,266 2,853 $1,467 1,343 7,024 11,345 48,038 893 1,489 2,181 Salaries and wages expense-office Sales revenue Supplies expense-office 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 Sales revenue Cost of goods sold Gross profit Operating expenses: Selling expenses: Advertising expense Commissions expense Insurance expense - salesperson's auto Total selling expenses General and administrative expenses: Depreciation expense - office building 9 o Salaries and wages expense - office Supplies expense - office Total general and administrative expenses Total operating expenses Loss from operations Other revenues and expenses: Interest expense Interest revenue Rent revenue Excess of other revenues over other expenses Income before taxes QOO 100 Income tax expense Net income Foodhack Check My Work The purpose of the multiple-step income statement is to subdivide the income statement into specific sections in order to provide important subtotals. Review the example of the multiple-step income statement in the text and note the subtotals that are shown. Notice the difference in the order of accounts-not all revenue or all expenses are kept in the same area. 2. What advantage do you see in multi-step income statement? The income statement is subdivided into specific sections and provides the reader with important subtotals. 3. Compute Shaw's profit margin. Round your answer to one decimal place. %