Income Statement Preparation The following selected information is taken from th
ID: 2457556 • Letter: I
Question
Income Statement Preparation
The following selected information is taken from therecords of Pickard and Associates.
Accounts payable . . . . . . . . . . . . . . . . . . .. . . . . $ 143,000
Accounts receivable . . . . . . . . . . . . . . . . .. . . . . 95,000
Advertising expense . . . . . . . . . . . . . . . . .. . . . . 14,500
Cash . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 63,000
Supplies expense . . . . . . . . . . . . . . . . . . .. . . . . 31,500
Rent expense . . . . . . . . . . . . . . . . . . . . .. . . . . . 12,000
Utilities expense . . . . . . . . . . . . . . . . . .. . . . . . . 2,500
Income taxes (30% of income before taxes) . . . .?
Miscellaneous expense . . . . . . . . . . . . . . . .. . . . 5,100
Owners’ equity . . . . . . . . . . . . . . . . .. . . . . . . . . 215,000
Salaries expense . . . . . . . . . . . . . . . . . . .. . . . . 78,000
Fees (revenues) . . . . . . . . . . . . . . . . . . .. . . . . . 476,000
Explanation / Answer
Income statement Revenues 476,000 -Expenses Salary exp. 78,000 Rent exp. 12,000 utility exp 2,500 Adv.exp 14,500 Supplies 31,500 Misc.exp 5,100 143,600 Income before taxes 332,400 -30%taxes 99,720 NetIncome 232,680 Income taxes = $ 99,720