The adjusted trial balance of Club Canada Wholesale Inc. contained the following accounts at December 31, the company's year end:

Instructions
(a) Prepare a single-step income statement.
(b) Prepare a multiple-step income statement.
(c) Compare the two statements and comment on the usefulness of each one.
(d) Are the expenses in the statements classified by nature or by function? Explain.

Transcribed Image Text:

CLUB CANADA WHOLESALE INC Adjusted Trial Balance December 31, 2018 Debit Credit Cash Accounts receivable Prepaid insurance Inventory Supplies Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipmen Accounts payable Unearned revenue Income tax payable Bank loan payable Common shares Retained earnings Sales $ 12,275 19,700 2,400 104,600 6,430 128,500 219,000 $ 93,060 95,500 33,400 60,900 9,650 3.500 98,200 50,00o 142,325 1,099,2o0 Sales returns and allowances Sales discounts Cost of goods sold Administrative expenses Selling expenses Interest expense Interest revenue Income tax expense 23,560 14,265 806,240 88,515 42,100 12,350 2,400 17,200 $1,592,635 $1,592,635