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Financial & Managerial Accounting
Found in: Page 29
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

What information is reported in an income statement?

Income is the financial statement that reports revenues and expenses.

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Step by Step Solution

Step 1: Definition of the income statement

An income statement is defined as the financial statement which shows income and expenses, and computes the net income of the business.

Step 2: Information reported in an income statement

The income statement reports the information related to revenues such as the cash sales revenue, credit sales revenue, service revenue, and expenses such as operating and non-operating expenses.

Most popular questions for Business-studies Textbooks

Nina Niko launched a new business Niko’s Maintenance Co. that began operations on June 1. The following transactions were completed by the company during that first month.

June

1 Nina Niko invested $130000 cash in the company in exchange for its common stock.

2 The company rented a furnished office and paid $6000 cash for June’s rent.

4 The company purchased $2400 of equipment on credit.

6 The company paid $1150 cash for this month’s advertising of the opening of the business.

8 The company completed maintenance services for a customer and immediately collected $850 cash.

14 The company completed $7500 of maintenance services for City Center on credit.

16 The company paid $800 cash for an assistant’s salary for the first half of the month.

20 The company received $7500 cash payment for services completed for City Center on June 14.

21 The company completed $7900 of maintenance services for Paula’s Beauty Shop on credit.

24 The company completed $675 of maintenance services for Build-It Coop on credit.

25 The company received $7900 cash payment from Paula’s Beauty Shop for the work completed on June 21.

26 The company made payment of $2400 cash for equipment purchased on June 4.

28 The company paid $800 cash for an assistant’s salary for the second half of this month.

29 The company paid $4000 cash in dividends to the owner (sole shareholder).

30 The company paid $150 cash for this month’s telephone bill.

30 The company paid $890 cash for this month’s utilities.

Required 1. Create the following table similar to the one in Exhibit 1.9.

Enter the effects of each transaction on the accounts of the accounting equation by recording dollar increases and decreases in the appropriate columns. Do not determine new account balances after each transaction. Determine the final total for each account and verify that the equation is in balance.

Rivera Roofing Company, owned by Reyna Rivera, began operations in July and completed these transactions during that first month of operations.

July 1 Reyna Rivera invested $80,000 cash in the company in exchange for its common stock.

2 The company rented office space and paid $700 cash for the July rent.

3 The company purchased roofing equipment for $5,000 by paying $1,000 cash and agreeing to pay the $4,000 balance in 30 days.

6 The company purchased office supplies for $600 cash.

8 The company completed work for a customer and immediately collected $7,600 cash for the work.

10 The company purchased $2,300 of office equipment on credit.

15 The company completed work for a customer on credit in the amount of $8,200.

17 The company purchased $3,100 of office supplies on credit.

23 The company paid $2,300 cash for the office equipment purchased on July 10.

25 The company billed a customer $5,000 for work completed; the balance is due in 30 days.

28 The company received $8,200 cash for the work completed on July 15.

30 The company paid an assistant’s salary of $1,560 cash for this month.

31 The company paid $295 cash for this month’s utility bill.

31 The company paid $1,800 cash in dividends to the owner (sole shareholder).

Required 1. Create the following table similar to the one in Exhibit 1.9.

Use additions and subtractions within the table to show the dollar effects of each transaction on individual items of the accounting equation. Show new balances after each transaction.

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