Answer and Explanation:
A. The preparation of the multiple income statement is presented below:
Prestige Furnishings Company
Multiple-step income statement
For the year ended October 31, 2016
Sales $6,144,850
Less: Cost of goods sold -$3,925,500
Gross profit $2,219,350
Less: Operating expenses
Administrative expenses -$515,750
Selling expenses -$732,500
Supplies expenses -$92,700
Total operating expenses -$1340,950
Operating income $878,400
Non operating income or others
Less: Interest expense -$9,950
Net income $868,450
B. The major advantage is that the multiple-step income statement reflects the relationship between the gross profit ratio i.e gross profit to sales that expressed in a percentage form and it also depicts the multiple levels indicating the operating expenses, operating income, non operating income, etc
