Question

The account balances of Wilson Towing Service at June 30, 2016, follow:

Equipment $12,950
Office supplies 1,000
Notes payable 4,500
Rent expense 500
Cash 1,400
Dividends 5,500
Service revenue 12,500
Accounts receivable 8,000
Accounts payable 10,000
Retained earnings
June 1, 2016 5,900
Salaries expense 2,500
Common stock 2,000
Required:
1. Prepare the income statement for Wilson Towing Service for the month ending June 30, 2016.
2. What does the income statement report?

Answer 1

$9,500

The income statement will report both Revenues which is Service revenue and Expenses which are Salaries expense and

Rent expense

Step-by-step explanation:

Preparation for income statement for Wilson Towing Service

Income statement for Wilson Towing Service for the month ending June 30, 2016.

REVENUE

Service Revenue 12,500

Less EXPENSES:

Salaries expense (2,500)

Rent expense (500)

Net income $9,500

Therefore net inome for income statement for Wilson Towing Service for the month ending June 30, 2016 will be $9,500

Based on the above calculation the income statement will report both Revenues which is Service revenue and Expenses which are Salaries expense and Rent expense.