Question

On December 31, Fighting Okra Cooking Services reports the following revenues and expenses. Service revenue $ 78,500 Postage expense 1,500 Legal fees expense 2,600 Rent expense 21,000 Salaries expense 22,000 Supplies expense 20,000 In addition, the balace of cmmon stock at the beginning of the year was $175,000, and the balance of retained earnings was $36,000 During the year, the shares of common stock for $30,000 and paid dividends of $20,000. Prepare an income statement.

Answer 1

Explanation:

The preparation of the year-end income statement for Fighting Okra Cooking Services is presented  below:

                                      Fighting Okra Cooking Services

                                                 Income statement  

                                                As on December 31

Revenue  

Service revenue $78,500

Total revenues $78,500 (A)

Less: Expenses

Postage expense $1,500

Legal fees expense $2,600

Rent expense $21,000

Salaries expense $22,000

Supplies expense $20,000

Total expenses $67,100 (B)

Net income $11,400 (A- B)