The account balances for Atlantis Aquatics, Inc. for the year ended December 31, 2013, are presented next in random order:
Cash ............... $ 3,700
Equipment ............ 13,700
Accounts Payable ......... 4,500
Common Shares ......... 35,000
Long-Term Notes Payable ...... 10,000
General Expenses ......... 18,200
Wages Payable ............ 1,100
Supplies ............ 900
Building ............ 125,000
Sales Returns and Allowances ...... 4,800
Prepaid Rent ............ 800
Retained Earnings ........ 13,800
Inventory ............ 1,700
Cost of Goods Sold ....... $136,400
Accumulated Depreciation, Equipment . 6,100
Unearned Revenues ....... 1,900
Sales Revenue ............ 243,500
Accounts Receivable ....... 3,200
Accumulated Depreciation, Building ... 18,500
Mortgage Payable (Long-Term) ...... 37,000
Dividends ............ 34,000
Sales Discounts ........ 2,200
Selling Expenses ........ 26,800
Requirements
1. Prepare Atlantis Aquatics’ single-step income statement.
2. Would you recommend the use of the single-step income statement format by a merchandiser? Why?