Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration


Horngren'S Financial And Managerial Accounting
Found in: Page 46

Short Answer

Using the accounting equation for transaction analysis and preparing financial statements Allen Shonton recently opened his own accounting firm on April 1, which he operates as a corporation. The name of the new entity is Allen Shonton, CPA. Shonton experienced the following events during the organizing phase of the new business and its first month of operations in 2018: Apr. 5 Shonton deposited $75,000 in a new business bank account titled Allen Shonton, CPA. The business issued common stock to Shonton. 6 Paid $300 cash for letterhead stationery for new office. 7 Purchased office furniture for the office on account, $9,500. 10 Consulted with tax client and received $4,000 for services rendered. 11 Paid utilities, $190. 12 Finished tax hearings on behalf of a client and submitted a bill for accounting services, $20,000. 18 Paid office rent, $750. 25 Received amount due from client that was billed on April 12. 27 Paid full amount of accounts payable created on April 7. 30 Cash dividends of $3,500 were paid to stockholders. Requirements 2. Prepare the following financial statements: a. Income statement.

The net income of the company is $23,060.

See the step by step solution

Step by Step Solution

Calculation of net income

Net income is calculated as follows:

Explanation of net income

In the situation when the total revenues are greater than the total expenses, it results in net income.

Income statement is shown as follows:

Allen Shonton, CPA

Income Statement

Month Ended April 30, 2018


Service Revenue



Rent Expense


Utilities Expense


Total Expenses


Net Income


Most popular questions for Business-studies Textbooks


Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.