Refer to the list of income statement items in Problem 2-6. Assume that Shaw Corporation classifies all operating expenses into two categories: (1) selling and (2) general and administrative. Required 1. Prepare a multiple-step income statement for the year ended December 31, 2012. 2. What advantages do you see in this form for the income statement? 3. Compute Shaws profit margin. 4. Comment on Shaws profitability. What other factors need to be taken into account to assess shaws profitability? Problem 2-6 Income Statement Data 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 expensesalespersons auto 2,250 Supplies expenseoffice 890
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