Multiple$-$Step Income Statement

On March $31,20$Y$9,$ the balances of the accounts appearing in the ledger of Royal Furnishings Company, a furniture store, are as follows:

Line Item Description Amount

Accounts Receivable $$170,000$

Accumulated Depreciation$$Building $750,000$

Administrative Expenses $435,000$

Building $3,500,000$

Cash $80,000$

Common Stock $300,000$

Cost of Goods Sold $5,500,000$

Dividends $175,000$

Interest Expense $15,000$

Inventory $$980,000$

Notes Payable $250,000$

Office Supplies $20,000$

Retained Earnings $1,987,000$

Salaries Payable $8,000$

Sales $8,245,000$

Selling Expenses $575,000$

Store Supplies $90,000$

Question Content Area

a$.$ Prepare a multiple$-$step income statement for the fiscal year ended March $31,20$Y$9.$

Royal Furnishings Company

Income Statement

For the Year Ended March $31,20$Y$9$

Line Item Description Amount Amount

$$-$ Select $-$

$-$ Select $-$

Gross profit $Gross profit

Expenses:

$$-$ Select $-$

$-$ Select $-$

Total expenses Total expenses

$$-$ Select $-$

Other revenue and expense:

$-$ Select $-$

$$-$ Select $-$

Question Content Area

b$.$ What is a major advantage of the multiple$-$step income statement over the single$-$step income statement?