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    Bears 1985's Avatar
    Bears 1985 Posts: 3, Reputation: 1
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    #1

    Apr 8, 2009, 03:58 PM
    Income Statement Preparation
    Income Statement Preparation


    Accounts payable.. . $ 143,000
    Accounts receivable.. . 95,000
    Advertising expense.. . 14,500
    Cash.. . 63,000
    Supplies expense.. . 31,500
    Rent expense.. . 12,000
    Utilities expense.. . 2,500
    Income taxes (30% of income before taxes)..
    Miscellaneous expense.. . 5,100
    Owners’ equity.. . 215,000
    Salaries expense.. . 78,000
    Fees (revenues).. . 476,000
    1. Prepare an income statement for the year ended December 31, 2009. (Assume that
    11,000 shares of stock are outstanding.)

    My work so far... It doesn't look right and I can't figure it out. Can you help?[/B]

    Income Statement
    Fees (revenue) $476,000.00
    Accounts Receivable $95,000.00
    Accounts Payable $(143,000.00)
    Cash $63,000.00
    Advertising Expense $(14,500.00)
    Supplies Expense $(31,500.00)
    Rent Expense $(12,000.00)
    Utilities Expense $(2,500.00)
    Salaries Expense $(78,000.00)
    Miscellaneous Expenses $(5,100.00)
    Owners Equity $215,000.00


    Net Income $562,400.00
    Income taxes (30% of income before taxes) $168,720.00

    Share Price $51.13
    Ks2867's Avatar
    Ks2867 Posts: 2, Reputation: 1
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    #2

    Apr 8, 2009, 04:20 PM
    Accounts Receivable, Accounts Payable, Cash, and Owner's Equity are Balance Sheet items.

    Remove those and recalculate your taxes and you will have the correct net income. Then divide by Shares outstanding to get earnings per share.
    Bears 1985's Avatar
    Bears 1985 Posts: 3, Reputation: 1
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    #3

    Apr 8, 2009, 05:02 PM
    Quote Originally Posted by Ks2867 View Post
    Accounts Receivable, Accounts Payable, Cash, and Owner's Equity are Balance Sheet items.

    Remove those and recalculate your taxes and you will have the correct net income. Then divide by Shares outstanding to get earnings per share.
    Thank You for your help. It makes sense now!

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