Problem 2-6 Single-Step Income Statement

The following income statement items, arranged in alphabetical order, are taken from the records

of Shaw Corporation for the year ended December 31, 2012:

Advertising expense $ 1,500 Interest expense $ 1,400

Commissions expense 2,415 Interest revenue 1,340

Cost of goods sold 29,200 Rent revenue 6,700

Depreciation expenseoffice

building 2,900

Salaries and wages

expenseoffice 12,560

Income tax expense 1,540 Sales revenue 48,300

Insurance expense

salespersons auto 2,250

Supplies expenseoffice 890

Required

1. Prepare a single-step income statement for the year ended December 31, 2012.

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

Problem 2-7 Multiple-Step Income Statement and Profit