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Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 5,100 Salaries expense 2,050 Accounts payable 3,100 Retained earnings 4,050 Utilities expense 1,200 Supplies 13,500 Service revenue 9,000 Common stock 5,700 Required: Use only the appropriate accounts to prepare an income statement.

Respuesta :

Answer:

Net income = $5,750

Explanation:

The question is to compute the income statement based on given information

COWBOY LAW FIRM'S INCOME STATEMENT for DECEMBER ENDING

Description                                            Amount ($)                Amount ($)

Service Revenue                                                                       9,000

Deduct the total expenses as follows:

Salaries                                                    2,050

Utilities                                                     1,200

Total Expenses                                                                           (3,250)

Net Income                                                                                   5,750

Note: that the remaining figures, cash, accounts payable, retained earnings and the common stock are relevant for the preparation of the Balance sheet or the Statement of Financial position. The balance sheet is grouped into asset- cash, liabilities - accounts payable and equity - stock and retained earning.

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