Question

Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 4,600 Salaries expense 1,800 Accounts payable 2,600 Retained earnings 4,100 Utilities expense 1,000 Supplies 13,000 Service revenue 8,500 Common stock 5,200 Required: Use only the appropriate accounts to prepare an income statement.

Answer 1

Answer:

                                                  Cowboy Law Firm

                    Income statement for the period ended December

                                                                          Amount in $

Service revenue                                                   8,500

Utilities                                                                  (1,000)                                    

Salaries expense                                                 (1,300)

Net income/(loss)                                                  6,200

Explanation:

An income statement is a part of the financial statements that shows how profitable the activities of an entity was for a given period of time. It is usually stated as the income statement for a period end.

The elements of the income statement include the revenue otherwise called sales, expenses including cost of goods sold, operating expenses etc and the profit or loss as well as the other comprehensive income/loss.