Question

The adjusted trial balance of Bridgeport Corp. at December 31, 2017, includes the following accounts:

Retained Earnings $17,121
Dividends $6,443
Service Revenue $38,907
Salaries and Wages Expense $13,017
Insurance Expense $1,851
Rent Expense $3,888
Supplies Expense $1,492, and Depreciation Expense $920.
Required:
1. Prepare an income statement for the year.

Answer 1

Income Statement of Bridgeport Corp.

At December 31, 2017

Service Revenue $38,907

Less

Salaries and Wages Expense $13,017

Insurance Expense $1,851

Rent Expense $3,888

Supplies Expense $1,492,

Depreciation Expense $920. $21,168

Net Income $17,739

The dividends and retained earnings are shown on the equity statement and not on the income statement.

The income statement only contains revenues and expenses for the current period and dividends are not expenses.