Refer to the list of income statement items in Problem 2-6A. Assume that Corbin Enterprises 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, 2012.

2. What advantages do you see in this form for the income statement?

3. Compute Corbin's profit margin.

4. Comment on Corbin's profitability. What other factors need to be taken into account to assess Corbin's profitability?

Data From Problem 2-6A

The following income statement items, arranged in alphabetical order, are taken from the records of Corbin Enterprises for the year ended December 31, 2012:

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$ 26,400 Advertising expense $ 9,000 Rent expense-office Rent expense-salesperson's car Cost of goods sold Depreciation expense-computer Dividend revenue Income tax expense 150,000 18,000 Sales revenue 4,500 350,000 Supplies expense-office Utilities expense 1,300 6,750 2,700 30,700 Interest expense 1,900 Wages expense-office 45,600