Question

Identify financial statement components and prepare income statement. E1-8 The following items and amounts were taken from Lonyear Inc.'s 2017 income statement and balance sheet Cash Accounts LO 3), C Retained earnings Cost of goods sold Salaries and wages 84,700 receivable 123,192 438,458 115,131 88,419 Sales revenue 584,951 6,499 49,384 Notes payable Accounts expense payable Prepaid insurance 7,818 Service revenue4,806 Inventory 64,618 Interest expense 1,882 Instructions (a) In each, case, identify on the blank line whether the item is an asset (A), liability (L), stockholders' equity (SE), revenue (R), or expense (E) item. (b) Prepare an income statement for Lonyear Inc. for the year ended December 31,2017

Answer 1

a)

Assets	Cash	$    84,700
Stockholders' equity	Retained earnings	$ 123,192
Expense	Cost of goods sold	$ 438,458
Expense	Salaries and wages expense	$ 115,131
Assets	Prepaid insurance	$      7,818
Assets	Inventory	$    64,618
Assets	Accounts receivable	$    88,419
Revenue	Sales revenue	$ 584,951
Liabilities	Notes payable	$      6,499
Liabilities	Accounts payable	$    49,384
Revenue	Service revenue	$      4,806
Expense	Interest expense	$      1,882

b)

Lonyear Inc
Income Statement
For the year ended December 31, 2017
Revenues
Sales revenue	$ 584,951
Service revenue	$      4,806
Total revenues		$ 589,757
Expenses
Cost of goods sold	$ 438,458
Salaries and wages expense	$ 115,131
Interest expense	$      1,882
Total expenses		$ 555,471
Net income		$    34,286

You can reach me over comment box if you have any doubts. Please rate this answer