Single Step vs Multi-Step Income Statement

E4-4 (Multiple-Step and Single-Step) Two accountants for the firm of Allen and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2012 information related to Webster Company ($000 omitted). Administrative expense
Officers’ salaries $4,900
Depreciation of office furniture and equipment 3,960
Cost of goods sold 63,570
Rent revenue 17,230
Selling expense
Transportation-out 2,690
Sales commissions 7,980
Depreciation of sales equipment 6,480
Sales revenue 96,500
Income tax expense 7,580
Interest expense 1,860 Instructions (a)Prepare an income statement for the year 2012 using the multiple-step form. Common shares outstanding for 2012 total 40,550 (000 omitted). (b)Prepare an income statement for the year 2012 using the single-step form. (c)Which one do you prefer? Discuss. a) Sales revenue 96,500 Cost of goods sold 63,570 Gross profit 32,930 Operating Expenses Selling commissions Sales commissions 7,980 Depr. Of sales equipment 6,480 Transportation-out 2,690 Administrative expenses Officers salaries 4,900 Depr. Of office furn. and equip. 3,960 Income from Operations 6,920 Other Revenue and Gains Rent revenue 17,230 Other Expenses and Losses Interest expense 1,860 Income before income tax Income tax 7,580 Net income 14,710 Earnings per share ($14,710 / 40,550) 0.362762022 b) Revenues Sales revenue 96,500 Rental revenue 17,230 Total revenues 113,730 Expenses Cost of goods sold