Question

The​ asset, liabilities, and equities of Drought Design Studio have the following balances at December 31​, 2018. The retained earnings was $35,000 at the beginning of the year. At year​ end, common stock was $17,000 and dividends were $61,000.

Notes Payable $14,000
Rent Expense 23,000
Cash 3,200
Office Supplies 5,100
Salaries Expense 65,000
Property Tax Expense 2,200


Office Furniture $48,400
Utilities Expense 7,200
Accounts Payable 3,600
Service Revenue 154,600
Accounts Receivable 9,300
Miscellaneous Expense 3,800


Required:
Prepare the income statement for Drought Design Studio for the year ending December 31​, 2018.

Answer 1

Drought Design Studio

Income statement for the year ending December 31​, 2018.

Revenue

Service Revenue $154,600

Expenses

Rent Expense $23,000

Salary Expense $65,000

Property Tax Expense $2,200

Utilities Expenses $7,200

Miscellaneous Expenses $3,800

Less: Total Expenses $101,200

Net Income $53,400