Prepare an income statement for the three months ended December 31, 2021. Revenue BUSINESS SOLUTIONS Income Statement For Three Months Ended December 31, 2021
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![Number
101
106
126
128
131
163
164
210
236
307
318
319
403
612
613
623
637
640
652
655
676
677
684
901
Cash
Accounts receivable
Computer supplies
Prepaid insurance
Accumulated depreciation-Office equipment
167
Computer equipment
168 Accumulated depreciation-Computer equipment
201
Prepaid rent
office equipment
Revenue
Account Title
Accounts payable
Wages payable
Unearned computer services revenue
Common stock
Retained earnings
Dividends
Computer services revenue
Depreciation expense-Office equipment
Depreciation expense-Computer equipment
Wages expense
Insurance expense
Rent expense
Computer supplies expense
Advertising expense
Mileage expense
Miscellaneous expenses
Repairs expense-Computer
Income summary
Totals
Expenses
Debit
$38,464
13,018
2,645
BUSINESS SOLUTIONS
Income Statement
For Three Months Ended December 31, 2021
1,980
3,140
8,800
22,000
6,300
0
0
2,175
8
0
8
1,648
674
230
745
Credit
Prepare an income statement for the three months ended December 31, 2021.
$0
8
68,000
e
33,819
$ 101,819 $ 101,819](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d5c0861-e09c-41e7-848b-b81ec717e9a3%2F81a3f95a-a1fd-4494-b763-80982bb06028%2Fofhrj9b_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
![Financial & Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781285866307/9781285866307_smallCoverImage.gif)
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
![Financial & Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781285866307/9781285866307_smallCoverImage.gif)