Question

Income Statement and Balance Sheet

The records of R. Levy, Interior Decorator, show the following information for the year-end December 31, 2016:

Notes Payable $16,000 Supplies $24,400
Decorating Fees Earned 270,400 Cash 16,800
Insurance Expense 6,000 Accounts Receivable 42,400
Supplies Expense 38,800 Advertising Expense 6,800
Miscellaneous Expense 800 Salaries Expense 120,000
Common Stock 46,400 Rent Expense 30,000
Retained Earnings ? Accounts Payable 7,200
Required

Prepare an income statement for the year.

Answer 1

Answer:

Explanation:

In the income statement, the total revenues and the total expenses are recorded.  

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.

The preparation of the income statement is presented in the spreadsheet. Kindly find the attachment below: