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Q23E_1

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 892

Short Answer

Calculating income and cost per service for a service company

Buddy Grooming provides grooming services for pets. In April, the company earned $16,300 in revenues and incurred the following operating costs to groom 660 dogs:

Wages Expense $ 4,061

Grooming Supplies Expense 1,675

Building Rent Expense 900

Utilities Expense 305

Depreciation Expense—Equipment 55

Requirements 1. What is Buddy’s operating income for April?

The net operating income for the month of April is $9,304.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Definition of Income Statement

The income statement is defined as the financial statement which shows the revenues and expenses of a business incurred during the year.

Step 2: Preparation of income statement

Income Statement

Amount ($)

Amount ($)

Revenue

Service Revenue

$16,300

Expenses

Building Rent Expense

$900

Depreciation Expense - Equipment

$55

Grooming Supplies Expense

$1,675

Utilities Expense

$305

Wages Expense

$4,061

Total Expense

$6,996

Operating income

$9,304

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