Question

On June 1, 2022, Blossom Company was started with an initial investment in the company of $20,000 cash. Here are the assets, liabilities, and common stock of the company at June 30, 2022, and the revenues and expenses for the month of June, its first month of operations:

Cash - $ 4,700
Notes payable - $12,200
Accounts receivable - 4,100
Accounts payable - 600
Service revenue - 7,600
Supplies expense - 1,000
Supplies - 2,460
Maintenance and repairs expense - 610
Advertising expense - 400
Utilities expense - 290
Equipment - 24,200
Salaries and wages expense - 1,500
Common stock - 20,000
Turn this into a monthly income statement.

Answer 1

Blossom Company

Income Statement

For the month ended June 30, 2022

Revenue $7,600

Less:

Operating expenses

Supplies expense $1,000

Repairs and maintenance 610

Advertising expense 400

Utilities expense 290

Salaries and wages 1,500

TOTAL OPERATING EXPENSE $3,800

NET OPERATING INCOME $3,800

Step-by-step explanation:

In preparation of an income statement, we will begin with the revenue then less all expenses to get the net operating income.

The items that we have to include in the income statement are all nominal accounts because all real accounts are reflected on Balance Sheet.

Cash, Notes payable, Accounts receivable, Accounts payable, Supplies, Equipment and common stock are all real account. Therefore, they are all baance sheet account and will not reflect to income statement.