Question

As of December 31, 2017 Armani Company's financial records show the following items and amounts. Cash Accounts receivable Supplies Equipment Accounts payable A. Armani, Capital, Dec. 31, 2016 A. Armani, Capital, Dec. 31, 2017 A. Armani, Withdrawals Consulting revenue Rental revenue Salaries expense Rent expense Selling and administrative expenses $10,000 9,000 6,000 5,000 23,000 4,000 7,000 13,000 33,eee 22,000 20,000 12,000 8,000 Note: Early in 2017, the owner invested $1,000 cash in the business. Required: Prepare the 2017 year-end income statement for Armani Company. ARMANI COMPANY Income Statement For Year Ended December 31, 2017 Revenues Total revenues Expenses Total expenses

Answer 1

Answer :-

Preparation of 2017 year end Income Statement for Armani Company :-

ARMANI COMPANY
Income Statement For the year ended December 31,2017
Revenues
Consulting Revenue	$33,000
Rental Revenue	$22,000
Total Revenue		$55,000
Expenses
Salaries Expenses	$20,000
Rent Expenses	$12,000
Selling and Administrative Expenses	$8,000
Total Expenses		$40,000
Net Income ( Total Revenue - Total Expenses)		$15,000

Select the item that best completes each of the descriptions below.

a. Balance sheet accounts are arranged into three general categories.

Explanation :- Balance sheet is generally classified into three categories - 1)Assets 2) Liability and 3) Equity

b. Owner, capital and owner, withdrawals are examples of Equity   Accounts

Explanation :-Owner Capital are shown in Equity section of Balance sheet . Anything related to owner whether it withdrawal or Capital Contribution is shown in Equity Accounts

c Accounts payable, unearned revenue, and note payable are examples of Liability account.

d Accounts receivable, prepaid accounts, supplies, and land are examples of _Asset _ account.

e. A(n) _Account_ is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.