On march 31, 2010, the balances of the accounts appearing in the

On March 31, 2010, the balances of the accounts appearing in the ledger of El Dorado Furnishings Company, a furniture wholesaler, are as follows:

 

Administrative Expenses   $ 250,000       Office Supplies $ 21,200

Building 1,025,000                                    Retained Earnings 937,600

Capital Stock 200,000                              Salaries Payable 6,000

Cash 97,000                                            Sales 2,550,000

Cost of Merchandise Sold 1,400,000       Sales Discounts 40,000

Dividends 50,000                                      Sales Returns and Allowances 160,000

Interest Expense 15,000                           Selling Expenses 410,000

Merchandise Inventory 260,000                 Store Supplies 15,400

Notes Payable 59,000 .

 

a. Prepare a multiple-step income statement for the year ended March 31, 2010.

 

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

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