. Advertisement .
..3..
. Advertisement .
..4..
......... ADVERTISEMENT ......... ..8..
Below are the account balances for Cowboy Law Firm at the end of December.
| Accounts | Balances |
| Cash | $ 4,800 |
| Salaries expense | 1,900 |
| Accounts payable | 2,800 |
| Retained earnings | 4,200 |
| Utilities expense | 1,200 |
| Supplies | 13,200 |
| Service revenue | 8,700 |
| Common stock | 5,400 |
Required:
Use only the appropriate accounts to prepare an income statement.
♦ Relevant knowledge
Net income is calculated by subtracting all expenses from the income of the company. These expenses comprise of the cost of selling goods as well as operating costs as well as interest costs and tax-related expenses. Net income is believed to be the top line on the income statement.
2 Answers