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Using the below trail balance, prepare income statement for the start-up company ABC as on 31st April XXXX
| Trail balance of ABC Company as on 31st April XXXX | ||
|---|---|---|
| Debit ($) | Credit ($) | |
| Banking equipment | 10000 | |
| Debtors | ||
| Bank | 5000 | |
| Capital | 16000 | |
| Drawings | 600 | |
| Loan | 1800 | |
| Creditors | ||
| Services | 18000 | |
| Salaries | 9500 | |
| Telephone expenses | 700 | |
| 25800 | 25800 | |
Solution
The solution is as follows −
While preparing income statement, we consider only expenses and income.
Income => services => 18000
Expenses => salaries + telephone expenses => 9500 + 700 => 10200
| Income statement for the company ABC for period ending on 31st April XXXX | ||
|---|---|---|
| Debit ($) | Credit ($) | |
| Income | 18000 | |
| (services) | 18000 | |
| Expenses | (10200) | |
| Salaries | 9500 | 7800 |
| Telephone expenses | 700 | |
| Net profit | ||
Updated on: 28-Sep-2020
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