Question

Question:Preparing financial statements from the trial balance and calculating the debt ratio

Preparing financial statements from the trial balance and calculating the debt ratio

Account Title Debit Credit

Office Supplies 1,400

Cash 32,000

Accounts Receivable 9,100

Prepaid Insurance 2,600

Equipment 24,000

Accounts Payable 3,400

Unearned Revenue 1,296

Notes Payable 34,000

Common Stock 20,000

Dividends 3,000

Salaries Expense 1,600

Rent Expense 700

Utilities Expense 100

Service Revenue 15,804

Total Balance \( 74,500 \) 74,500

Requirements 1. Prepare the income statement for the month ended July 31, 2018

Short answer

The income statement is the statement that records the income and expenses of the business and net income of the business is $13,404

Step-by-step solution

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

The income statement is defined as a financial statement that records the revenues generated during the year and expenses incurred during the year.

Preparation of Income Statement

Sheila Sanchez, Registered Dietician
Income statement
July 31, 2018
Particulars	Amount ($)	Amount ($)
Service Revenue		$15,804
Expenses
Salaries Expense	$1,600
Rent Expense	$700
Utility Expense	$100
Total Expense		$2,400
Net Income		$13,404