EXERCISE 5-5
| Purpose: | (L.O. 5) This exercise will allow you to practice preparing an income statement and to contrast the multiple-step format and the single-step format for this statement. |
The accountant for Steve Bradley Golf Products, Inc. has compiled the following information from the company's records as a basis for an income statement for the year ended December 31, 2014.
| Rental revenue | $ 29,000 |
| Interest expense | 18,000 |
| Salaries and wages | 151,700 |
| Supplies | 10,000 |
| Sales | 970,000 |
| Freight-out | 7,600 |
| Advertising expense | 15,800 |
| Depreciation on store equipment | 65,000 |
| Sales returns and allowances | 9,000 |
| Rent expense | 154,900 |
| Cost of goods sold | 446,000 |
| Dividends | 40,000 |
Instructions
(a) Prepare a multiple-step income statement.
(b) Prepare a single-step income statement.
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