Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 4,900 Salaries expense 1,950 Accounts payable 2,900 Retained earnings 3,950 Utilities expense 1,000 Supplies 13,300 Service revenue 8,800 Common stock 5,500 Use only the appropriate accounts to prepare an income statement.

Question

Business

Zachary Day

1 July, 16:42

Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 4,900 Salaries expense 1,950 Accounts payable 2,900 Retained earnings 3,950 Utilities expense 1,000 Supplies 13,300 Service revenue 8,800 Common stock 5,500 Use only the appropriate accounts to prepare an income statement.

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Summer Compton · Answer 1

Revenue $8,800

Less:

Operating expenses

Salaries expense $1,950

Utilities expense 1,000

total operating expenses $2,950

Gross profit $5,850

Explanation:

Income Statement comprises all nominal accounts (revenue & expenses) only.

Based on the given data;

cash, accounts payable, Retained earnings, Supplies and common stock are all real accounts that are to be reflected on the balance sheet section of the financial statements.