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.

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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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