Question

Part 2: Below is a fact scenario. Using the box provided to the right, prepare an income statement for Tiffany's Catering Service for the year ending December 31, 2019, demonstrating that Tiffany earned income of $93,900. Assume the company will not be subject to income tax. INCOME STATEMENT Tiffany's Catering Service For the Year Ended December 31, 2019 Net Sales(revenues) Expense Food 93,000 During the spring semester of her senior year, Tiffany decided to open a catering service business. She started business on January 1, 2019. She rented a small kitchen space and purchased a stove, supplies, and food. To acquire these items, she invested some of her own money and she borrowed from the bank by signing a two-year note payable promising to pay interest every 12 months with the first interest payment due December 31, 2019. The principal is due at the end of 2020. At the end of 2019 Tiffany had no supplies or food left over. Stove Repair Workers Wage Interest Phone Bill Rent Utilities Supplies Areview of the checkbook showed the following: Bank deposits of collections from austomers totaled $90,000. The following checks had been written: disposable plates and utensils, $6,200; food, $7,100; buying a used stove $12,000, repairs to her stove, $900; workers' wages, $10,000; interest on the loan, $200; cell phone bill, $1,200; rent, $6,000. Anotebook kept in the kitchen reflected the following: Customers still owed her $40,000 for catering services already rendered and she owed $2,500 for disposable plates and utensils (credit card charges). In addition, Tiffany estimated that she used up one sixth of the stove during 2019.

Answer 1

Income Statement
Tiffany's Catering Service
For the year ended December 31, 2019
Net Sales(revenues)		$93,900
Expenses
Food	$7,100
Stove Repair	$900
Workers Wage	$10,000
Interest	$200
Phone Bill	$1,200
Rent	$6,000
Utilities	$0
Supplies	$6,200
Depreciation ($12,000/6)	$2,000
Total Expenses		$33,600
Net Income		$60,300