The account balances for Allied Electrical Supply, Inc., for the year ended August 31, 2012, are presented next in random order:

Requirements
1. Prepare Allied Electrical Supply€™s single-step income statement.
2. Would you recommend the use of the single-step income statement format by a merchandiser?Why?

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Cash Equipment Accounts Payabl. Common Stock. 4,200 7,200 5,000 Sales Revenue 3,500 Accumulated Depreciation Cost of Goods Sold$126,300 11,200 Accumulated Depreciation 50,000 Unearned Revenues. 19,400 9,600 2,100 246,000 5,100 Equipment.... General Expenses... Salaries Payabl. Supplies Building Sales Returns and 1,100 Building 20,500 155,000 Mortgage Payable 43,500 75,000 3,700 38,000 11,900 (Long-Term) Allowances Prepaid Rent Interest Expense...69,800 Retained Earnings. 2,300 Dividends 2,800 Sales Discounts 1200 Selng Expenses Inventory