Question

Exercise 1-4 This information relates to Kingbird, Inc. for the year 2017. Retained earnings, January 1, 2017 $93,800 Advertising expense 2,520 Dividends 8,400 Rent expense 14,560 81,200 Service revenue Utilities expense 3,360 Salaries and wages expense 42,000

Answer 1

SOLUTION

1. Income statement-

Particulars	Amount ($)	Amount ($)
Revenue:
Service revenue		81,200
Expenses:
Salaries and wages expense	42,000
Rent expense	14,560
Utilities expense	3,360
Advertising expense	2,520
Total expenses		(62,440)
Net income / (Loss)		18,760

2. Statement of Retained Earnings-

Particulars	Amount ($)
Retained earnings, January 1	93,800
Add: Net income / (Loss)	18,760
	112,560
Less: Dividends	(8,400)
Retained earnings, December 31	104,160