Question

These financial statement items are for Novak Corp. at year-end, July 31, 2017. Salaries and wages payable $ 3,980 Salaries and wages expense 58,900 Supplies expense 16,800 Equipment 20,400 Accounts payable 4,100 Service revenue 67,500 Rent revenue 9,700 Notes payable (due in 2020) 3,000 Common stock 16,000 Cash 30,300 Accounts receivable 10,980 Accumulated depreciation—equipment 7,700 Dividends 4,000 Depreciation expense 5,700 Retained earnings (beginning of the year) 35,100 Prepare an income statement for the year. Novak Corp. did not issue any new stock during the year. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Answer 1

Answer:

Service revenue                          67, 500

Rent revenue                                  9, 700

Salaries and wages expense     (58,900)

Supplies expense                        (16,800)

Depreciation expense                   (5,700)  

               net loss                           (4,200)

Explanation:

The net income or loss will be detemined by revenues - expenses

we will list the revenues first and then proceed to list and subtract all the expenses accounts.

In this case, this arise to a net loss because expenses are higher than revenues.