Question

Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 4,000 Salaries expense 1,500 Accounts payable 2,000 Retained earnings 4,400 Utilities expense 1,000 Supplies 12,400 Service revenue 7,900 Common stock 4,600
Required: Use only the appropriate accounts to prepare an income statement.

Answer 1

Explanation:

The preparation of the end December Income statement for Cowboy Law Firm is presented below:

                                          Cowboy Law Firm

                                           Income statement  

Revenue  

Service Revenue $7,900

Total revenues $7,900 (A)

Less: Expenses

Salaries expense $1,500

Utilities expense $1,000

Total expenses $2,500 (B)

Net income $5,400 (A- B)