Two accountants for the accounting firm of Mack and Byner are arguing about the merits of presenting an income statement in a multiple-step versus a single- step format. The discussion involves the following information related to Fontenot Company for the current year ($000 omitted).

Administrative expense Officers salaries $ 6,860

Depreciation of office furniture 5,544

Cost of goods sold 84,798

Rental revenue 24,122

Selling expense Transportation-out 3,766

Sales commissions 11,172

Depreciation of sales equipment 9,072

Sales 135,100

Income tax 12,698

Interest expense 2,604

Required:

(a) Prepare an income statement for the current year using the single-step form. Average common shares outstanding were 40,550 (000 omitted).

(b) Prepare an income statement for the current year using the multiple-step form.

(c) Which one do you prefer? Explain.