Final answer:
To prepare the income statement, analyze the trial balance by categorizing accounts as revenue or expense. Identify discrepancies by comparing debits and credits. Calculate total assets by adding up asset accounts. Determine net profit by subtracting total expenses from total revenue.
Step-by-step explanation:
To prepare the income statement for Bright Day (Pty) Ltd, you need to analyze the trial balance and categorize each account as revenue or expense. Revenue accounts include sales, service fees, and interest income, while expense accounts include salaries, rent, and utilities. Calculate the total revenue by summing up all the revenue accounts, and calculate the total expenses by summing up all the expense accounts. Finally, subtract the total expenses from the total revenue to determine the net profit for the year.
To identify any discrepancies in the trial balance, compare the debits and credits for each account. If the debits and credits don't match, there may be an error in recording transactions. Look for any accounts with imbalances and investigate them further to correct the discrepancies.
To calculate the total assets of Bright Day (Pty) Ltd, you need to add up all the asset accounts listed in the trial balance. Asset accounts include cash, accounts receivable, inventory, and fixed assets. Sum up the balances of all these accounts to get the total assets.
Determining the net profit for the year is part of preparing the income statement. After calculating the total revenue and total expenses, subtract the total expenses from the total revenue to get the net profit. The net profit represents the earnings of Bright Day (Pty) Ltd after deducting all expenses.