Question

On June 1, 2017, Windsor, Inc. was started with an initial investment in the company of $22,420 cash. Here are the assets, liabilities, and common stock of the company at June 30, 2017, and the revenues and expenses for the month of June, its first month of operations:
Cash $ 4,830
Notes payable $12,460
Accounts receivable 4,470
Accounts payable 970
Service revenue 7,730
Supplies expense 1,100
Supplies 2,300
Maintenance and
repairs expense 700
Advertising expense 400
Utilities expense 200
Equipment 26,230
Salaries and
wages expense 1,630
Common stock 22,420
In June, the company issued no additional stock but paid dividends of $1,720.

Answer 1

Question Completion:

Prepare an Income Statement for the month of June.

Answer:

Windsor, Inc.

Income Statement for the month ended June 30, 2017:

Service Revenue                  $7,730

Supplies expense    1,100

Maintenance and

  repairs expense     700

Advertising expense 400

Utilities expense       200

Salaries and

 wages expense    1,630   $4,030

Net Income                         $3,700

Explanation:

Windsor, Inc. Income Statement is where the revenues and expenses are summarized in order to arrive at the net income or profit of the business.  Temporary accounts are closed to the income statement.  These are accounts that are periodic in nature.  They are not permanent accounts, which are transferred to the next period.  The only element of the income statement that is taken to the balance sheet is the net income or loss.