Question

Prime ​Services, Inc., began 2018 with total assets of $ 255 million and ended 2018 with total assets of $ 350 million. During 2018​, Prime Services earned revenues of $ 393 million and had expenses of $ 168 million. Prime Services declared and paid dividends of $ 29 million in 2018. Prepare the​ company's income statement for the year ended December​ 31, 2018​, complete with an appropriate heading. Prepare the income statement. ​(Enter all amounts in millions. For​ example, $100 million should be entered into the statement as​ $100. Enter a net loss with a minus sign or parentheses. If a box is not used in the financial statement leave the box​ empty; do not select a label or enter a​ zero.) (millions) Net income (loss)

Answer 1

Total Revenues=$393

Total Expenses=$168

Net profit=$225 million

Step-by-step explanation:

An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period. The income statement focuses on the four key items - revenue, expenses, gains, and losses. It does not cover receipts (money received by the business) or the cash payments/disbursements (money paid by the business).

The general structure of an income statement proceeds as follow:

Revenue/Sales (+)

Cost of Goods Sold (COGS) (-)

=Gross Profit

Marketing, Advertising, and Promotion Expenses (-)

General and Administrative (G&A) Expenses (-)

=EBITDA

Depreciation & Amortization Expense (-)

=Operating Income or EBIT

Interest (-)

Other Expenses (-)

=EBT (Pre-Tax Income)

Income Taxes (-)

=Net Income

In this exercise:

Total Revenues=$393

Total Expenses=$168

Net profit=$225 million

Note: dividends shouldn't be included in the Income Statement