Question

Nancy Tercek started a delivery service, Marigold Corp., on June 1, 2019. The following transactions occurred during the month of June. June 1 Stockholders invested $17,800 cash in the business in exchange for common stock. 2 Purchased a used van for deliveries for $15,000. Nancy paid $3,500 cash and signed a note payable for the remaining balance. 3 Paid $600 for office rent for the month. 5 Performed $4,700 of services on account. 9 Declared and paid $300 in cash dividends. 12 Purchased supplies for $100 on account. 15 Received a cash payment of $1,100 for services performed on June 5. 17 Purchased gasoline for $300 on account. 20 Received $1,600 cash for services performed. 23 Made a cash payment of $500 on the note payable. 26 Paid $300 for utilities. 29 Paid for the gasoline purchased on account on June 17. 30 Paid $1,190 for employee salaries.Prepare an income statement for the month of June.

Answer 1

Answer:

Nancy Tercek    

Income Statement for the month ended June 30 2019    

                   $                $

Service Revenue    6300

   

Less: Expenses    

Rent Expense   600  

Gas Expense   300  

Utilities Expense         300  

Salaries Expense  1190   (2390)

Net Income             3910

   

Explanation:

• These are the only transactions relating to income statement. We calculated the revenue by adding the service revenue earned on 5 june (4700) and on 20 June (1600).

• In service business there are no Cost of Goods Sold.
• We deduct the Expenses relating to operations.
• There are only four expenses and the finance cost relating to notes payable cannot be calculated as the interest rate is not provided.