Question

On March 31, 2019, the balances of the accounts appearing in the ledger of Racine Furnishings...

  1. 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 $712,600 Merchandise Inventory $932,550
    Administrative Expenses 526,600 Notes Payable 245,550
    Building 2,522,650 Office Supplies 19,050
    Cash 178,750 Salaries Payable 8,100
    Cost of Merchandise Sold 3,804,300 Sales 6,714,750
    Interest Expense 10,300 Selling Expenses 681,650
    Kathy Melman, Capital 1,502,450 Store Supplies 89,900
    Kathy Melman, Drawing 168,050

    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
    $
    Gross profit $
    Expenses:
    $
    Total expenses
    $
    Other expense:
    $

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

Homework Answers

Answer #1
Answer

Racine Furnishing Company

Multiple Income Statement
Sales $6,714,750
Cost Of Merchandise Sold $3,804,300
Gross Profit $2,910,450
Expenses
Administrative Expense $558,400
Selling Expense $681,650
Total Expense $1,240,050
Operating Income $1,670,400
Other Expense
Les: Interest Expense $     10,300
Net Income $1,660,100
b
Major advantage is represents the relationship established between the gross profit to sales
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