Questions: ERNST CONSULTING Income Statement

Solution Steps

To prepare an income statement, we need to calculate the net income by subtracting total expenses from total revenues. First, identify all revenue and expense items from the provided data. Then, sum up the revenues and expenses separately. Finally, subtract the total expenses from the total revenues to find the net income for December.

To prepare the income statement, we first identify the revenue and expense items from the given data. The revenue is from consulting, and the expenses include rent, salaries, telephone, and miscellaneous expenses.

Sum up all the expenses to find the total expenses: \[ \text{Total Expenses} = \text{Rent Expense} + \text{Salaries Expense} + \text{Telephone Expense} + \text{Miscellaneous Expenses} \] \[ = 2380 + 5620 + 780 + 600 = 9380 \]

Subtract the total expenses from the consulting revenue to find the net income: \[ \text{Net Income} = \text{Consulting Revenue} - \text{Total Expenses} \] \[ = 12720 - 9380 = 3340 \]

Final Answer