Question

Dalton Hair Stylists’s adjusted trial balance follows. Prepare Dalton’s income statement for the year ended December 31, 2018. DALTON HAIR STYLISTS Adjusted Trial Balance December 31, 2018 Account Title Office Supplies Cash Debit Credit Accounts Receivable Equipment Accumulated Depreciation—Equipment Accounts Payable Interest Payable Notes Payable Common Stock Dividends Service Revenue Rent Expense Supplies Expense Depreciation Expense—Equipment Interest Expense Balance \( 1,300 \) 36,150 \( 36,150 400 \) 2,200 3,100 500 1,400 16,150 13,800 3,900 850 2,200 2,300 1,500 1,800 20,900 Total.

Short answer

Income statement is shown as follows:

DALTON HAIR STYLISTS
Income Statement
Year Ended December 31, 2018
Revenues
Service Revenue		$13,800
Expenses
Rent Expense	$3,900
Supplies Expense	850
Depreciation Expense—Equipment	2,200
Interest Expense	2,300
Total Expenses		9,250
Net Income		$4,550

Step-by-step solution

Explanation of net income

When the total revenues are higher than the total expenses, then it results in the net income in the period.

Calculation of net income

Net income is calculated as follows:

$\begin{array}{c}\mathbf{Net}\mathbf{}\mathbf{Income}\mathbf{=}\mathbf{Total}\mathbf{}\mathbf{Revenues}-\mathbf{Total}\mathbf{}\mathbf{Expenses}\\ \mathbf{=}\mathbf{\$}\mathbf{13}\mathbf{,}\mathbf{800}-\mathbf{\$}\mathbf{9}\mathbf{,}\mathbf{250}\\ \mathbf{=}\mathbf{\$}\mathbf{4}\mathbf{,}\mathbf{550}\end{array}$