Q1SE Dalton Hair Stylists鈥檚 adjuste... [FREE SOLUTION]

Chapter 4: Q1SE (page 217)

Dalton Hair Stylists鈥檚 adjusted trial balance follows. Prepare Dalton鈥檚 income statement for the year ended December 31, 2018. DALTON HAIR STYLISTS Adjusted Trial Balance December 31, 2018 Account Title Office Supplies Cash Debit Credit Accounts Receivable Equipment Accumulated Depreciation鈥擡quipment Accounts Payable Interest Payable Notes Payable Common Stock Dividends Service Revenue Rent Expense Supplies Expense Depreciation Expense鈥擡quipment Interest Expense Balance $ 1,300 $ 36,150 $ 36,150 400 $ 2,200 3,100 500 1,400 16,150 13,800 3,900 850 2,200 2,300 1,500 1,800 20,900 Total.

Expert verified

Income statement is shown as follows:

DALTON HAIR STYLISTS
Income Statement
Year Ended December 31, 2018
Revenues
Service Revenue		$13,800
Expenses
Rent Expense	$3,900
Supplies Expense	850
Depreciation Expense鈥擡quipment	2,200
Interest Expense	2,300
Total Expenses		9,250
Net Income		$4,550

When the total revenues are higher than the total expenses, then it results in the net income in the period.

Net income is calculated as follows:

$\begin{matrix} Net Income = Total Revenues - Total Expenses \\ = $ 13, 800 - $ 9, 250 \\ = $ 4, 550 \end{matrix}$

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