Question

Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 3,800 Salaries expense 1,400 Accounts payable 1,800 Retained earnings 4,700 Utilities expense 1,200 Supplies 12,200 Service revenue 7,700 Common stock 4,400 Required: Use only the appropriate accounts to prepare an income statement.

Answer 1

Answer:

Cowboy Law Firm

Income Statement for the year ended 31 December

Service revenue                            $7,700

Less Expenses :

Salaries expense         $1,400

Utilities expense          $1,200    ($2,600)

Net Income                                    $5,100

Explanation:

It is important to remember that the income statement accounts for Income and expense items only.