Question

Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following selected accounts and amounts for the month of August. Use this information to prepare an August income statement for the business.Cash $ 25,360 Dividends $6,000Accounts receivable 22,360 Consulting fees earned 27,000Office supplies 5,250 Rent expense 9,550Land 44,000 Salaries expense 5,600Office equipment 20,000 Telephone expense 860Accounts payable 10,500 Miscellaneous expenses 520Common stock 102,000

Answer 1

Answer:

Income statement for the year XXXX ended August 31th

Consulting fees earned 27,000

Rent expense                    9,550

Salaries expense              5,600

Telephone expense             860

Miscellaneous expenses    520  

Total expenses                 16,530

Net income                      10,470

Explanation:

To solve for net income we have to subtract revenue for expenses

the expenses will have the word expense in their name,

Is important to notice dividends are not expense as they represent the distribution of earned to the stockholders or owners of the company. It doesnt' represent an expense associate with the outgoing business activities.