Refer to the list of income statement items in Problem 2-6. Assume that Shaw Corporation classifies all operating expenses into two categories:
(1) Selling and
(2) General and administrative.

Required
1. Prepare a multiple-step income statement for the year ended December 31, 2010.
2. What advantages do you see in this form for the income statement?
3. Compute Shaw’s profit margin.
4. Comment on Shaw’s profitability. What other factors need to be taken into account to assess Shaw’s profitability?