As the end of the fiscal year, August 31, 2010, selected accounts from the adjusted trial balance for Pasha's Patio Furniture were as follows:

Required
1. Using the information given, prepare a multistep income statement for Pasha's Patio Furniture Store Salaries Expense, Advertising Expense, Store Supplies Expense, and Depreciation Expense-Store Equipment are selling expenses. The other expenses are general and administrative expenses. The company uses the perpetual inventory system. Show details of net sales and operating expenses.
2. Based on your knowledge at this point in the course, how would you use the income statement for Pasha's Patio Furniture to evaluate the company's profitability? What other financial statement should be considered, andwhy?

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Pasha's Patio Furniture Partial Adjusted Trial Balance August 31, 2010 Sales Sales Returns and Allowances Cost of Goods Sold Freight-In Store Salaries Expense Office Salaries Expense Advertising Expense Rent Expense Insurance Expense Utilities Expense Store Supplies Expense Office Supplies Expense Depreciation Expense-Store Equipment Depreciation Expense-Office Equipment $169,000 $ 9,000 61.400 2.300 32,825 12,875 24.100 2.400 1.200 1560 1,175 1250