On August 31, 2008, the balances of the accounts appearing in the ledger of The Bent Needle Company, a furniture wholesaler, are as follows:

a. Prepare a multiple-step income statement for the year ended August 31, 2008.
b. Compare the major advantages and disadvantages of the multiple-step and single-step forms of incomestatements.

Transcribed Image Text:

Administrative Expenses Building Cash Cost of Merchandise Sold Interest Expense Jason Ritchie, Capital Jason Ritchie, Drawing Merchandise Inventory $125,000 512,500 48,500 700,000 7,500 568,580 25,000 130,000 Notes Payable Office Supplies Salaries Payable Sales Sales Discounts Sales Returns and Allowances Selling Expenses Store Supplies S 25,000 10,600 1,275,000 20,000 80,000 205,000