Question

his information relates to Sunland Company for the year 2022. Retained earnings, January 1, 2022 $77,700 Advertising expense 2,080 Dividends 6,960 Rent expense 12,000 Service revenue 67,280 Utilities expense 2,900 Salaries and wages expense 34,800

Answer 1

Answer:

Explanation:

Preparation of the income statement for Sunland Company ending December 31, 2022 is presented below:

                                           Sunland Company

                                           Income statement  

Revenue  

Service revenue $67,280

Total revenues $67,280 (A)

Less: Expenses

Advertising expense $2,080

Rent expense $12,000

Utilities expense 2,900

Salaries and wages expense 34,800

Total expenses $57,780 (B)

Net income $15,500 (A- B)

Simply we deduct the total expenses from the total revenues so that the net income could arrive