The adjusted trial balance of Club Canada Wholesale Inc. contained the following accounts at December 31, the company's yearend:

Instructions:
(a) Prepare a single-step income statement.
(b) Prepare a multiple-step income statement.
(c) Compare the two statements and comment on the usefulness of each one.
(d) Are the expenses in the statements classified by nature or by function? Explain.

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CLUB CANADA WHOLESALE INC. Adjusted Trial Balance December 31, 2012 Debit Credit Accounts receivable Notes receivable Merchandise inventory $ 8,875 17,600 30,000 92,400 3,780 Land Buildings Accumulated depreciation-buildings 197,000 $ 93,575 83,500 Accumulated depreciation-equipment Accounts payable Unearned revenue Income tax payable 33,400 57,500 7,550 3,500 86,000 20,000 139,675 922,360 Common shares Retained earnings Sales returns and allowances Sales discounts Cost of goods sold Administrative expenses Selling expenses Interest expense Interest revenue Income tax expense 17,745 4,615 692,100 116,115 5,900 8,830 2,400 15,500 $1,365,960 $1,365,960