Question

The adjusted trial balance of Splish Brothers Inc. at December 31, 2019, includes the following accounts: Common Stock $17,100, Dividends $7,500, Service Revenue $36,800, Salaries and Wages Expense $15,000, Insurance Expense $2,600, Rent Expense $3,000, Supplies Expense $2,400, and Depreciation Expense $1,200. Prepare an income statement for the year.

Answer 1

Answer:

The income statement of Splish Brothers Inc. as at 31st December 2019 gives a net profit of $12600 from which dividends of $7500 was declared, leaving in the business retained earnings of $5100 for reinvestment purposes.

Explanation:

Splish Brothers Inc. Income Statement is as below:

Splish Brothers Inc. Income Statement as at 31 December 2019

                                    $                                                $

Sales Revenue                                                         36800

Less expenses:

Salaries and wages    15000

Insurance expenses   2600

Rent expense               3000

Supplies expense       2400

Depreciation expense 1200

Total expenses                                                           (24200)

Net profit                                                                      12600