Textbook Problem

Problem 3-63A Revenue and Expense Recognition

Security Specialists performs security services for local businesses. During 2019, Security Specialists performed of security services and collected cash from customers. Security Specialist’s employees earned salaries of $82,350 per month. During 2019, Security Services paid salaries of S980,200 cash for work performed. At the beginning of 2019, there were $2,875 of supplies on hand. Supplies of S65,800 were purchased during the year, and $9,225 of supplies were on hand at the end of the year. Other general and administrative expenses incurred during the year were $26,500.

Required:

1. Calculate revenue and expenses for 2019.
2. Prepare the 2019 income statement.
3. CONCEPTUAL CONNECTION Describe the accounting principles used to prepare the income statement.