The following account balances are taken from Sherwood Ltd.’s adjusted trial balance at June 30, 2020:

Required

a. Prepare a single-step statement of income for the year ended June 30, 2020.

b. Prepare a multi-step statement of income for the year ended June 30, 2020.

c. Compare the two statements and comment on the usefulness of each one.

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Debit Credit Sales revenue $1,250,000 Advertising expense $125,000 Cost of goods sold 596,000 General and administrative expenses 40,000 Selling expenses 75,000 Depreciation expense 70,000 Interest expense 37,000 Interest revenue 44,000 Income tax ex pense 10,700 Wages expense 165,000 Utilities expense 106,000