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E4-6 The accountant of Weatherspoon Shoe Co. has

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E4-6 (Multiple-step and Single-step) The accountant of Weatherspoon Shoe Co. has compiled the following information from the company’s records as a basis for an income statement for the year ended
December 31, 2010.

Rental revenue  29,000
Interest expense  18,000
Market appreciation on land above cost  31,000
Wages and salaries- Sales  114,800
Materials and supplies - sales  17,600
Income tax  30,600
Wages and salaries - administrative  135,900
Other adminstrative expenses  51,700
Cost of goods sold  516,000
Net sales 980000
Depreciation on plant assets (70% selling, 30% administrative) 65,000
Cash dividends declared 16,000

There were 20,000 shares of common stock outstanding during the year.

(a) Prepare a multiple-step income statement.
(b) Prepare a single-step income statement.
(c) Which format do you prefer? Discuss.

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