40PGB_1 - Horngren'S Financial And Managerial Accounting

Question

Question: Preparing financial statements from the trial balance and calculating the debt ratio

Preparing financial statements from the trial balance and calculating the debt ratio

Account Title                                       Debit            Credit

 Office Supplies                                 1,400

Cash                                                    32,000

Accounts Receivable                       9,100

Prepaid Insurance                            2,600

Equipment                                        24,000                                                     

Accounts Payable                                                   3,400

Unearned Revenue                                                1,296

Notes Payable                                                         34,000

Common Stock                                                        20,000

Dividends                                   3,000

Salaries Expense                       1,600

Rent Expense                              700  

Utilities Expense                          100 

Service Revenue                                                  15,804

Total Balance \( 74,500             \) 74,500

Requirements 1. Prepare the income statement for the month ended July 31, 2018

Step-by-Step Solution

Answer

The income statement is the statement that records the income and expenses of the business and net income of the business is $13,404

Step-by-step Solution Step 1: Definition of Income Statement

The income statement is defined as a financial statement that records the revenues generated during the year and expenses incurred during the year.

Step 2: Preparation of Income Statement

Sheila Sanchez, Registered Dietician
Income statement
July 31, 2018
Particulars	Amount ($)	Amount ($)
Service Revenue		$15,804
Expenses
Salaries Expense	$1,600
Rent Expense	$700
Utility Expense	$100
Total Expense		$2,400
Net Income		$13,404