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Question:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . 65,000
Advertising expense . . . . . . . . . . . . . . . . . . . . . . 15,000
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,500
Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . 46,000
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
Income taxes (30% of income before taxes) . . . . ?
Miscellaneous expense . . . . . . . . . . . . . . . . . . . . 4,400
Owners’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000
Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . 61,000
Fees (revenues) . . . . . . . . . . . . . . . . . . . . . . . . . 384,000
1. Prepare an income statement for the year ended December 31, 2006. (Assume that 7,500
shares of stock are outstanding.)
Answer:
Income Statement: Dec 31 2006
Revenues: 384,000
Advertising Expense: 15k
Supplies Expense: (46k)
Rent Expense: (10k)
Utilities Expense: (3k)
Misc. Expense: (4.4k)
Salaries Expense: (61k)
Total Operating Expenses: (139.4k)
Operating Profits: 244.6k
Income Taxes (30% of 244.6k): (73.38k)
Net Income: 171.22k
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