Prepare an income statement
cash 16050.00
accounts receivable 1500.00
office supplies 1200.00
office equipment 18250.00
accounts payable 2350.00
Stanley Neal, Capital, 12850.00
fees income 36400.00
advertising expense 2750.00
salaries expense 7500.00
telephone expense 350.00
withdrawals 4000.00
It should be set up like this...
revenue
fees income
expenses
salaries expenses
utilities expenses
total expenses
net income
To prepare an income statement, follow these steps:
1. Identify the revenue: In this case, the revenue is the fees income, which is $36,400.00.
2. Identify the expenses: The expenses in this case are advertising expense ($2,750.00), salaries expense ($7,500.00), and telephone expense ($350.00).
3. Calculate the total expenses: Add up the amounts of all the expenses. In this case, the total expenses would be $2750 + $7500 + $350 = $10,600.00.
4. Calculate the net income: Subtract the total expenses from the revenue. In this case, the net income would be $36,400.00 - $10,600.00 = $25,800.00.
Therefore, the income statement would look like this:
Revenue:
Fees Income: $36,400.00
Expenses:
Advertising Expense: $2,750.00
Salaries Expense: $7,500.00
Telephone Expense: $350.00
Total Expenses: $10,600.00
Net Income: $25,800.00