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income statement

Accounts payable . . . . . . . . . . . . . . . . . . . . . .. $ 35,000
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . 65,000
Advertising expense . . . . . . . . . . . . . . . . . . . . . . 15,000
Cash . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 19,500
Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . 46,000
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . 3,000
Income taxes (30% of income before taxes) . . . . ?
Miscellaneous expense . . . . . . . . . . . . . . . . . . . . 4,400
Owners' equity . . . . . . . . . . . . . . . . . . . . . . . . 140,000
Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . 61,000
Fees (revenues) . . . . . . . . . . . . . . . . . . . . . . . . 384,000
1. Prepare an income statement for the year ended December 31, 2006. (Assume that 7,500
shares of stock are outstanding.)

Solution Preview

income statement preparation

Accounts payable . . . . . . . . . . . . . . . . . . . . . .. $ 35,000
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . 65,000
Advertising expense . . . . . . . . . . . . . . . . . . . . . . 15,000
Cash . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 19,500
Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . 46,000
Rent expense . . . . . . . . . . . . . . . . ...

Solution Summary

An income statement is devised.

$2.19