Question

As of December 31, 2017, Audi Company’s financial records show the following items and amounts. Required Prepare the 2017 year-end income statement for Audi Company.

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,800

Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200

Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,700

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100

Retained earnings, Dec. 31, 2016 . . . . . . . . . . . . . . . . 800

Retained earnings, Dec. 31, 2017 . . . . . . . . . . . . . . . . 1,200

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,600

Consulting revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,600

Rental revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,400

Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000

Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400

Selling and administrative expenses . . . . . . . . . . . . . . 1,600

Short answer

Retained earnings are the accumulated profit and net income is $3,000

Step-by-step solution

Definition of Dividends

The dividends are defined as the part of the profit which is distributed among the shareholders of the company.

Preparation of Income statement

Audi Company
Income Statement
As of December 31, 2017
	Amount ($)	Amount ($)
Revenue
Consulting Revenue	6,600
Rental Revenue	4,400
Total Revenue		11,000
Expenses
Salaries Expense	4,000
Rent Expense	2,400
Selling and administrative expenses	1,600