Question

Calculating income and cost per service for a service company

Buddy Grooming provides grooming services for pets. In April, the company earned \(16,300 in revenues and incurred the following operating costs to groom 660 dogs:

Wages Expense \) 4,061

Grooming Supplies Expense 1,675

Building Rent Expense 900

Utilities Expense 305

Depreciation Expense—Equipment 55

Requirements 1. What is Buddy’s operating income for April?

Short answer

The net operating income for the month of April is $9,304.

Step-by-step solution

Step-by-Step SolutionStep 1: Definition of Income Statement

The income statement is defined as the financial statement which shows the revenues and expenses of a business incurred during the year.

Preparation of income statement

Income Statement
	Amount ($)	Amount ($)
Revenue
Service Revenue		$16,300
Expenses
Building Rent Expense	$900
Depreciation Expense - Equipment	$55
Grooming Supplies Expense	$1,675
Utilities Expense	$305
Wages Expense	$4,061
Total Expense		$6,996
Operating income		$9,304