Question

Where2 Services is a small service firm that advises high school students on college opportunities. Joseph Kapp, the founder and president, has collected the following information for March: Advertising costs $ 6,000

Building rent and utilities 4,000

Printing, fax, and computing costs 4,750

Sales 24,500

Training costs 700

Travel expenses 4,500

Wages for part-time employees 7,000

Required: Prepare an income statement for March for Where2 Services

Answer 1

Income statement is statement of profit or loss of entity.

Computation of net income

Sales - Cost of goods sold = Gross profit

Gross profit - Expenses = Net income or loss