Item$1$

$10$

points

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The following adjusted trial balance for Bell Servicing was prepared at the end of the fiscal year, December $31,2023$:

Account Debit Credit

$101$ Cash $ $7,300$

$119$ Merchandise inventory $15,500$

$125$ Supplies $9,300$

$128$ Prepaid insurance $3,300$

$165$ Store equipment $50,300$

$166$ Accumulated depreciation, store equipment $ $46,100$

$167$ Office equipment $68,300$

$168$ Accumulated depreciation, office equipment $33,500$

$201$ Accounts payable $15,300$

$301$ Jonah Bell, capital $25,080$

$302$ Jonah Bell, withdrawals $40,300$

$413$ Sales $284,800$

$415$ Sales discounts $1,300$

$505$ Cost of goods sold $74,100$

$612$ Depreciation expense, store equipment $4,500$

$613$ Depreciation expense, office equipment $3,100$

$622$ Sales salaries expense $45,300$

$623$ Office salaries expense $31,300$

$637$ Insurance expense, store $1,300$

$638$ Insurance expense, office $1,250$

$640$ Rent expense, office space $12,300$

$641$ Rent expense, selling space $16,300$

$651$ Office supplies expense $1,130$

$652$ Store supplies expense $1,700$

$655$ Advertising expense $16,900$

Totals $ $404,780$ $ $404,780$

Required:

$1.$ Prepare a classified multiple$-$step income statement that would be used by the business$$s owner.

$2.$ Prepare a multiple$-$step income statement that would be used by external users.

$3.$ Prepare a single$-$step income statement that would be provided to decision makers outside the company.

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?