Whitney_Russell_ACC290_W1.docx - Preparing an Income Statement Retained Earnings Statement and Balance Sheet Whitney Russell ACC 290 Jonathon Gillen

Whitney_Russell_ACC290_W1.docx - Preparing an Income...

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Preparing an Income Statement, Retained Earnings Statement, and Balance Sheet Whitney Russell ACC 290 Jonathon Gillen 9/25/2017
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Income Statement The purpose of the income statement is to show the reader how much profit or loss an organization generated during a reporting period” (Bragg, 2015). The income statement shows your monthly expenses, which in turn assistances the business owner to set price points on services or products. It also helps investors see the practicability of the business. Investors generally use the income statement to make sure that the business can pay back any debts/loans. The top line (revenue) shows the currency coming in from sales. The middle line (expenses) shows the expenses and the bottom line (net income) shows the alteration between the two (whether you made money or not). (Liston, n.d). Example : On June 1, 2017, Elite Service Co. was started with an initial investment in the company of $22,100 cash. Below are the assets, liabilities, and common stock of the company June 30, 2017, and the revenues and expenses for the month of June, its first month of operations:” (University of Phoenix).
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Cash $4,600 Notes Payable $12,000 Accounts Receivable $4,000 Accounts Payable $500 Service Revenue $7,500 Supplies Expenses $1,000 Supplies $2,400 Maintenance and repairs expense $600 Advertising Expense $400 Utilities expense $300 Equipment $26,000 Salaries and wages expenses $1,4000 Common Stock $22,100 An analysis was done on the company Elite Service Co that was started on June 1, 2017 the income statement, retained earnings statement and balance sheets were analyzed and the finding presented. An analysis was conducted to analyze the
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