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Chapter 1: Q 34E (page 42)

Prepare the income statement for Damon Design Studio for the year ending December 31, 2018.

Short Answer

Expert verified

Income statement is shown as follows:

Damon Design Studio

Income Statement

Year Ended December 31, 2018

Revenues

Service Revenue

$154,600

Expenses

Rent Expense

23,000

Salaries Expense

65,000

Property Tax Expense

2,200

Utilities Expense

7,200

Miscellaneous Expense

3,800

Total Expenses

101,200

Net Income

$53,400

Step by step solution

01

Explanation of income statement

Income statement reports the total revenues , total expenses and net income (loss) for the period.

02

Calculation of net income

Net income is calculated as follows:

NetIncome=TotalRevenues-TotalExpenses=$154,600-$101,200=$53,400

Thus, net income is $53,400

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