Selected accounts from Keystone Furnitures adjusted trial balance as of August 31, 2014, the end of the

Selected accounts from Keystone Furniture’s adjusted trial balance as of August 31, 2014, the end of the fiscal year, follow.

Required
1. Prepare a multistep income statement for Keystone. 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 Keystone to evaluate the company’s profitability? What other financial statement should be considered, andwhy?

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Keystone Furniture Partial Adjusted Trial Balance August 31, 2014 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 867,824 22,500 442,370 20,156 215,100 53,000 36,400 28,800 5,600 17,520 4,928 3,628 3,600 3,700