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Problem 2-7 Multiple step income statement and profit margin Problem 2-7 Multiple-Step Income...

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Accounting

Problem 2-7 Multiple step income statement and profit margin

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Problem 2-7 Multiple-Step Income Statement and Profit Margin 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 Shaw's profit margin. 4. Comment on Shaw's profitability. What other factors need to be taken into account to assess Shaw's profitability? Problem 2-8 Statement of Cash Flows Colorado Corporation was organized on January 1, 2012, with the investment of $250,000 cash by its stockholders. The company immediately purchased an office building for $300,000' paying $210,000 in cash and signing a three-year promissory note for the balance. Colorado signed a five-year, $60,000 promissory note at a local bank during 2012 and received cash in the same amount. During its first year, Colorado collected $93,970 from its customers

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