The following adjusted trial balance for Bell Servicing was prepared at the end of the fiscal year, December 31, 2020:

Required

1. Prepare a classified multiple-step income statement that would be used by the business’s owner (like Exhibit 5.13).

2. Prepare a multiple-step income statement that would be used by external users (like Exhibit 5.14).

3. Prepare a single-step income statement that would be provided to decision makers outside the company (like Exhibit 5.15).

Analysis Component: If you were a decision maker external to Bell Servicing, which income statement format would you prefer and why, if you had a choice? Which income statement format(s) could you expect as an external user? Why?

Exhibition 5.13

Exhibition 5.14

Exhibition 5.15

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Debit Credit $ 8,000 101 Cash. Merchandise inventory. 119 16,200 125 Supplies. 10,000 4,000 128 Prepaid insurance. 51,000 165 Store equipment. Accumulated depreciation, store equipment. $ 46,800 166 Office equipment. 167 69,000 Accumulated depreciation, office equipment. 34,200 168 Accounts payable. Jonah Bell, capital. 201 16,000 301 29,000 302 Jonah Bell, withdrawals 41,000 291,800 413 Sales. 415 Sales discounts. 2,000 Cost of goods sold 74,800 505 Depreciation expense, store equipment. 612 5,200 613 Depreciation expense, office equipment. 3,800 Sales salaries expense. 622 46,000 Office salaries expense. 623 32,000 Insurance expense, store 2,000 637 1,600 638 Insurance expense, office 13,000 640 Rent expense, office space. Rent expense, selling space Office supplies expense 641 17,000 651 1,200 Store supplies expense. 652 2,400 655 Advertising expense.. 17,600 Totals. $417,800 $417,800