On October 31, 2016, the balances of the accounts appearing in the ledger of Pre
ID: 2545845 • Letter: O
Question
On October 31, 2016, the balances of the accounts appearing in the ledger of Prestige Furnishings Company, a furniture wholesaler, are as follows:
What is a major advantage of the multiple-step income statement over the single-step income statement?
Total stockholders’ equity
. Prepare a multiple-step income statement for the year ended October 31, 2016. Be sure to complete the statement heading. Refer to the information given in the exercise and to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. In the Other income and expenses section only, enter amounts that represent other expenses as negative numbers using a minus sign.
Prestige Furnishings Company
Income Statement
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Accumulated Depreciation-Building $752,300 Administrative Expenses 540,650 Building 2,553,550 Cash 167,750 Common Stock 288,000 Cost of Merchandise Sold 3,899,650 Dividends 178,650 Interest Expense 10,150 Merchandise Inventory 1,006,950 Notes Payable 255,800 Office Supplies 20,400 Retained Earnings 1,304,450 Salaries Payable 7,600 Sales 6,477,150 Selling Expenses 684,100 Store Supplies 92,400Explanation / Answer
Prestige Furnishing Company Income Statement For the year October 31,2016 Sales $6,477,150.00 Less: COGS $3,899,650.00 Gross profit $2,577,500.00 Less: Operating Expense Selling Expense $684,100.00 Administrative expense $540,650.00 $1,224,750.00 Income From Operation $1,352,750.00 Less: Non Operative Expense interest Expense $10,150.00 $10,150.00 Net Income $1,342,600.00 Multi Step Income Statement report Gross Profit , Operating Income and net income while in Single Step Income statement Net income arrived by deducting Cost of Goods Sale consist all the related total expenses from Sales.
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