The account balances for Paul€™s Furniture, Inc., for the year ended August 31, 2012, are presented next in random order:

Requirements
1. Prepare Paul€™s Furniture€™s single-step income statement.
2. Would you recommend the use of the single-step income statement format by a merchandiser?Why?

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Cash Equipment Accounts Payable. Common Stock Long-Term Notes Payable6 General Expenses Salaries Payabl. Supplies.1 Building ……… 2,400 Sales Returns and S 10,400 of Goods Sold.. S128,700 32,000 Accumulated Depreciation 5,100 13,700 3,100 247,000 6,300 Equipment 15,000 Unearned Revenues. 60,000 Sales Revenue.. 15,000 Accounts Receivable.... 2,600 Accumulated Depreciation Building 38,000 155,000 Mortgage Payable 20,500 64,000 1,900 .33,000 8,400 1,500 (Long-Term) Allowances Prepaid Rent Retained Earnings ,500 Dividends 1,900 Sales Discounts 58,000 Selling Expenses. Inventory Interest Expense