As of December 31 of the current year, Armani Company's records show the following. ints
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Cash
Accounts receivable
Supplies
Equipment
Accounts payable
Common stock
Retained earnings, Dec. 31, prior year
Retained earnings, Dec. 31, current year
Dividends
Consulting revenue
Rental revenue
Salaries expense
Rent expense
Selling and administrative expenses
$10,000
9,000
7,000
4,000
11,000
14,000
3,000
5,000
13,000
33,000
22,000
20,000
12,000
8,000
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Required:
Prepare the income statement for Armani Company for the current year ended December 31.

Armani Company

Income Statement for the current year ended December 31:

Revenue:

Consulting revenue                          $33,000

Rental revenue                                   22,000   $55,000

Expenses:

Salaries expense                                20,000

Rent expense                                      12,000

Selling and administrative expenses 8,000     40,000

Net Income                                                       $15,000

Retained earnings, Dec. 31, prior year                3,000

Dividends                                                           (13,000)

Retained earnings, Dec. 31, current year       $ 5,000

Explanation:

a) Data:

Cash   $10,000

Accounts receivable  9,000

Supplies  7,000

Equipment  4,000

Accounts payable  11,000

Common stock  14,000

Retained earnings, Dec. 31, prior year  3,000

Retained earnings, Dec. 31, current year  5,000

Dividends  13,000

Consulting revenue  33,000

Rental revenue  22,000

Salaries expense  20,000

Rent expense  12,000

Selling and administrative expenses 8,000

b) The income statement is a financial statement prepared at the end of a financial period to show the difference between the revenues and the expenses (called net income or loss).

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