Question

The adjusted trial balance for China Tea Company at December 31, 2021, is presented below:
Accounts Debit Credit
Cash $12,000
Accounts receivable 159,000
Prepaid rent 7,000
Supplies 28,000
Equipment 350,000
Accumulated depreciation $128,000
Accounts payable 12,000
Salaries payable 3,100
Interest payable 1,400
Notes payable (due in two years) 31,000
Common stock 230,000
Retained earnings 140,500
Dividends 27,000
Service revenue 380,000
Salaries expense 180,000
Advertising expense 77,000
Rent expense 15,000
Depreciation expense 33,000
Interest expense 3,000
Utilities expense 35,000
Totals $ 926,000 $ 926,000
Prepare an income statement for China Tea Company for the year ended December 31, 2021:

Answer 1

Answer:

China Tea Company

Income statement for the year ended December 31, 2021:

                                                            $

Service revenue                          380,000

Less Expenses :

Salaries expense         180,000

Advertising expense     77,000

Rent expense                 15,000

Depreciation expense  33,000

Interest expense             3,000

Utilities expense           35,000 (343,000)

Net Income / (loss)                        37,000

Explanation:

Net Income shows the Profit or Loss from Operating Activities during the Reporting Period.

The Items found in it comprise of Revenues/Income, Expenses and Profit/Loss.

Profit/ Loss = Sales - Expenses