Question

Below are the account balances for Cowboy Law Firm at the end of December.
Accounts Balances
Cash 5400
Salaries expense 2200
Accounts payable 3400
Retained earnings 3900
Utilities expense 1200
Supplies 13800
Service revenue 9300
Common stock 6,000
Required: Use only the appropriate accounts to prepare an income statement.

Answer 1

The preparation of the income statement is as follows:

Income statement

Service revenue $9,300

Less:

Salaries expense $2,200

Utilities expense $1,200

Total expenses -$3,400

Net income $5,900

Therefore we can conclude that the net income is $5,900.

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