Chapter 5, Problem 5.24EX

Multiple-step income statement

On March 31, 2018, the balances of the accounts appearing in the ledger of Royal Furnishings Company, a furniture wholesaler, are as follows:

Accounts Receivable	$ 170,000
Accumulated Depreciation—Building	750,000
Administrative Expenses	435,000
Building	3,500,000
Cash	80,000
Common Stock	300,000
Cost of Goods Sold	5,500,000
Dividends	175,000
Interest Expense	15,000
Inventory	$ 980,000
Notes Payable	250,000
Office Supplies	20,000
Retained Earnings	1,987,000
Salaries Payable	8,000
Sales	8,245,000
Selling Expenses	575,000
ore Supplies	90,000

A. Prepare a multiple-step income statement for the year ended March 31, 2018.

B. Compare the major advantages and disadvantages of the multiple-step and single-step forms of income statements.