Multiple-Step Income StatementOn March 31, 2019, the balances of the accounts appearing in the ledger of Racine Furnishings Company, a furniture wholesaler, are as follows:Accumulated Depreciation—Building$769,400 Merchandise Inventory$949,200Administrative Expenses515,050 Notes Payable260,900Building2,553,000 Office Supplies20,450Cash172,400 Salaries Payable8,300Cost of Merchandise Sold3,747,750 Sales6,389,100Interest Expense9,750 Selling Expenses693,950Kathy Melman, Capital1,618,250 Store Supplies89,700Kathy Melman, Drawing179,000 a. Prepare a multiple-step income statement for the year ended March 31, 2019.Racine Furnishings CompanyIncome StatementFor the Year Ended March 31, 2019 $fill in the blank fill in the blank Gross profit $fill in the blank Expenses: $fill in the blank fill in the blank Total expenses fill in the blank $fill in the blank Other expense: fill in the blank $fill in the blank b. What is a major advantage of the multiple-step income statement over the single-step income statement?

The income statement is one of the essential parts of the financial statement used for reporting the financial performance of the company over a specific accounting period, It includes revenues, expenditures, and also gain or loss.The major advantage of a multistep income statement is understanding the income statement i.e all items of the income statement are classified in a particular income statement so it is easily understandable.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Multiple-Step Income Statement

On March 31, 2019, the balances of the accounts appearing in the ledger of Racine Furnishings Company, a furniture wholesaler, are as follows:

Accumulated Depreciation—Building	$769,400	Merchandise Inventory	$949,200
Administrative Expenses	515,050	Notes Payable	260,900
Building	2,553,000	Office Supplies	20,450
Cash	172,400	Salaries Payable	8,300
Cost of Merchandise Sold	3,747,750	Sales	6,389,100
Interest Expense	9,750	Selling Expenses	693,950
Kathy Melman, Capital	1,618,250	Store Supplies	89,700
Kathy Melman, Drawing	179,000

a. Prepare a multiple-step income statement for the year ended March 31, 2019.

Racine Furnishings Company
Income Statement
For the Year Ended March 31, 2019
		$fill in the blank
		fill in the blank
Gross profit		$fill in the blank
Expenses:
	$fill in the blank
	fill in the blank
Total expenses		fill in the blank
		$fill in the blank
Other expense:
		fill in the blank
		$fill in the blank

b. What is a major advantage of the multiple-step income statement over the single-step income statement?

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