Question

The adjusted trial balance for China Tea Company at December 31, 2018, is presented below: Credit Debit 10,700 152,000 5,200 27,000 320,000 Cash Accounts receivable Prepaid rent Inventory Equipment Accumulated depreciation - equipment Accounts payable Notes payable - due in three months Salaries payable in Interest payable Common stock Retained earnings Sales revenue Costs of goods sold Salaries expenses Rent expenses Depreciation expense Interest expense Advertising expense Totals 127,000 32,000 32,000 4,200 1,200 210,000 54,400 420,000 190,000 122,000 17,000 32,000 2,200 2,700 880,800 880,800 Required: Prepare an income statement for China Tea Company for the year ended December 31, 2018

Answer 1

Solution:

AK SK $420,000 $190,000 $230,000 Chine Tea Company Income statement Sales Revenue Cost of goods sold Gross profit Less: operating expenses: Salaries expense Rent expense Depreciation Expense Advertising expense Total expenses Operating Income Less: other expenses: Interest expense Totals $122,000 $17,000 $32,000 $2,700 13 $173,700 $56,300 $2,200 $54,100 14 15 16 17 18 19 20 21 22 23 24 28 29 30 31 32 33 34 35 36 et2 (2) Sheet2 (3) Sheet50 (2) Sheet854 Sheet854 (3)