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In: Accounting

The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for...

The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for April 30, for Finnegan Co.:

Accumulated Depreciation

$32,000
Fees Earned

78,000
Depreciation Expense

7,250
Rent Expense

34,000
Prepaid Insurance

6,000
Supplies

400
Supplies Expense

1,800

​

Prepare an income statement.

Solutions

Expert Solution

Based on the information available, the Income statement for Finnegan Co. can be prepared as follows:-

Finnegan Company
Income Statement
Apr-30
Amount Amount
Revenues
Fees Earned           78,000
Expenses
Depreciation expense           7,250
Rent expense         34,000
Supplies expense           1,800
Total expenses           43,050
Net Income           34,950
(Revenue-Expenses)

Please note that Accumulated Depreciation and Supplies are Balance sheet items and are represented within the Income statement and Balance sheet respectively.

Also, with respect to Prepaid insurance , they represent the assets of the company and are reported within the Balance sheet. As and when the insurance expenses for the period are due, the actual expenses for the period are moved from the balance sheet to the income statement while the remaining amount is reported within Balance sheet as a current asset.

ekkarill92 answered 1 year ago
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