Two accountants for the accounting firm of Pham and Pun are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2014 information related to Saghir Company ($000 omitted).
Administrative expense
Officers’ salaries ................. $ 6,860
Depreciation of office furniture and equipment ..... 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

Instructions
(a) Prepare an income statement for the year 2014 using the multiple-step form. Common shares outstanding for 2014 total 40,550 (000 omitted).
(b) Prepare an income statement for the year 2014 using the single-step form.
(c) Which one do you prefer? Discuss.