Question

Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following accounts and amounts for the month of August. Use this information to prepare an August income statement for the business.

Cash ………………………… \(25,360 Consulting fees earned……. \) 27,000

Accounts receivable ………..22,360 Rent expense ………………….…9,550

Office supplies ………………...5,250 Salaries expense ………………..5,600

Land ……………………………44,000 Telephone expense …………….…860

Office equipment …………….20,000 Miscellaneous expenses ………...520

Accounts payable ……………10,500 Common stock …………….... 102,000

Dividends ……………………… 6,000

Short answer

The net income earned by the company is $10,470.

Step-by-step solution

Step-by-Step-SolutionStep 1: Income statement

An income statement is a summary of all the expenses and the losses that a business bears in an ordinary course of business. This statement shows the revenue earned through operational activities and also through non-operational sources. The incomes are matched with the corresponding expenses for the period. The difference is called the net income.

Income statement for August 31

Help Today Income Statement For the Month Ended August 31
Revenues Consulting fees earned Operating Expenses Rent Expenses Salaries Expenses Telephone expenses Miscellaneous Expenses Total Operating Expenses Net Income	$9550 5600 860 520	$27,000 $16,530 $10,470