Question

Home Realty, Incorporated, has been operating for three years and is owned by three investors. J. Doe owns 60 percent of the total outstanding stock of 9,000 shares and is the managing executive in charge. On December 31, the following financial items for the entire year were determined: sales revenue, $166,000; salaries and wages expense, $97,000; interest expense, $6,300; advertising expenses, $9,025; and income tax expense, $18,500. Also during the year, the company declared and paid the owners dividends amounting to $12,000. Prepare the company's income statement. HOME REALTY, INCORPORATED Income Statement $ 166,000 166,000 Revenues Sales Revenue Dividends Income Tax Expense Interest Expense Salaries and Wages Expense Sales Revenue me Tax Expert 97,000 6,300 9,025 18,500 MAMLAMA Total Expenses Net Income $ $ 130,825 35,175

Answer 1

Solution:

Income Statement on December 31st:

HOME REALTY, CORPORATION
Income statement
For period ended December, 31 st
Revenue
Sales Revenue	$               166,000
Other Revenue	$                             -
Total Revenue (A)	$               166,000
Expenses:
Salaries and Wages Expense	$                  97,000
Interest Expense	$                    6,300
Advertising Expenses	$                    9,025
Income Tax Expense	$                  18,500
Dividends	$                  12,000
Total Expenses (B)	$               142,825
Net Income (A-B)	$                  23,175