Question

On December 31, Fighting Okra Cooking Services reports the following revenues and expenses. Service revenue $ 84,000 Postage expense 1,950 Legal fees expense 2,850 Rent expense 11,500 Salaries expense 33,000 Supplies expense 19,000 In addition, the balance of common stock at the beginning of the year was $650,000, and the balance of retained earnings was $50,000. During the year, the company issued additional shares of common stock for $34,000 and paid dividends of $28,000. Required: 1. Prepare an income statement.

Answer 1

Answer:

                Fighting Okra Cooking Services

Income Statement for the years ended December 31, xxxx

Service revenue                              $84,000

Less: Supplies expense                 ($19,000)

Gross Income                                  $65,000

Less: Operating Expenses

Postage expense              $1,950

Legal fees expense          $2,850

Rent expense                    $11,500

Salaries expense              $33,000

                                                         ($49,300)  

Operating Income                            $15,700  

Explanation:

The interest and Tax expenses has not been given, so the income statement is ended up on Operating income.