Debit Credit Cash $ 1,260 Accounts Receivable 2,300 Prepaid Insurance 2,600 Notes Receivable (long-term) 3,300 Equipment 13,500 Accumulated Depreciation $ 3,200 Accounts Payable 5,720 Salaries and Wages Payable 1,150 Income Taxes Payable 3,200 Deferred Revenue 660
Debit Credit Cash $ 1,260 Accounts Receivable 2,300 Prepaid Insurance 2,600 Notes Receivable (long-term) 3,300 Equipment 13,500 Accumulated Depreciation $ 3,200 Accounts Payable 5,720 Salaries and Wages Payable 1,150 Income Taxes Payable 3,200 Deferred Revenue 660
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter1: Introduction To Accounting And Business
Section: Chapter Questions
Problem 4PEA
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Question
M4-14 through M4-17 (Algo) Reporting an Income Statement, Reporting a Statement of Retained Earnings , Reporting a Balance Sheet and Recording Closing Journal Entries [LO 4-4, LO 4-5]
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The Sky Blue Corporation has the following adjusted
Debit | Credit | |
---|---|---|
Cash | $ 1,260 | |
2,300 | ||
Prepaid Insurance | 2,600 | |
Notes Receivable (long-term) | 3,300 | |
Equipment | 13,500 | |
$ 3,200 | ||
Accounts Payable | 5,720 | |
Salaries and Wages Payable | 1,150 | |
Income Taxes Payable | 3,200 | |
Deferred Revenue | 660 | |
Common Stock | 2,700 | |
Retained Earnings | 1,120 | |
Dividends | 330 | |
Sales Revenue | 44,730 | |
Rent Revenue | 330 | |
Salaries and Wages Expense | 22,200 | |
Depreciation Expense | 1,600 | |
Utilities Expense | 4,520 | |
Insurance Expense | 1,700 | |
Rent Expense | 6,300 | |
Income Tax Expense | 3,200 | |
Total | $ 62,810 | $ 62,810 |
M4-14 (Algo)
Required:
-
Prepare an income statement for the year ended December 31.
-
How much net income did the Sky Blue Corporation generate during the year?
Expert Solution
Answer
Sky Blue Corporation | |
Income Statement for the period ended December 31 | |
Amount | |
Sales Revenue | $ 44,730 |
Rent Revenue | $ 330 |
Total Revenue (A) | $ 45,060 |
Salaries and wages expense | $ 22,200 |
Depreciation expense | $ 1,600 |
Utilities expense | $ 4,520 |
Insurance expense | $ 1,700 |
Rent expense | $ 6,300 |
Income tax expense | $ 3,200 |
Total Expenses (B) | $ 39,520 |
Net Income (A - B) | $ 5,540 |
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