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Q. 12SE

Horngren'S Financial And Managerial Accounting
Found in: Page 35

Short Answer

Centerpiece Arrangements has just completed operations for the year ended December 31, 2018. This is the third year of operations for the company. The following data have been assembled for the business: Insurance Expense $ 4,500 Salaries Expense $ 46,000 Service Revenue 70,000 Accounts Payable 17,600 Utilities Expense 1,400 Office Supplies 1,700 Rent Expense 16,000 Dividends 4,800 Common Stock 9,000 Accounts Receivable 8,000 Cash 7,200 Equipment 12,100 Retained Earnings, January 1, 2018 5,100

Preparing the income statement Prepare the income statement of Centerpiece Arrangements for the year ended December 31, 2018.

Centerpiece Arrangements

Income Statement

Year Ended December 31, 2018


Service Revenue



Insurance Expense


Utilities Expense


Rent Expense


Salaries Expense


Total Expenses


Net Income


See the step by step solution

Step by Step Solution

Step1: Explanation of net income

Net income is generated when total revenues are higher than the total expenses

Step2: Calculation of net income

Net income is calculated as follows :

Thus, net income is $2,100.

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