1. The Income Statement

2. Revenues Money or promise of money received from the sale of goods and services Money or promise of money received from the sale of goods and services Examples: Examples: Ticket Sales Repair Revenue Legal Services/Fees Shoe Sales Furniture Sales Expenses Items used to help generate the revenue in a business Examples: Telephone Salaries Advertising Rent Utilities

3. The Income Statement A financial statement used to help a business calculate and report its profit or loss on business operations, over a specific period of time.

4. Remember… Remember… Revenue – Expenses = Profit/Loss How much we make – how much we spend

5. Formatting Net Income/Loss is double underlined 2 columns – inner column for listing revenue/expenses, outer column for totals Date always reads “specific time period ended specific date” Month ended March 30 2014 Month ended March 30 2014 Year ended June 30 2013 Year ended June 30 2013 A “fiscal year” simply means an accounting year – the business may not have started precisely on January 1 st ! A “fiscal year” simply means an accounting year – the business may not have started precisely on January 1 st !

6. Preparing an Income Statement Mark’s revenue comes from repairs Repairs Revenue $9900 Repairs Revenue $9900 Mark’s expenses Salaries 2600 Rent 2000 Advertising 850 Supplies Expense 185 Utilities 235 Insurance 150 Delivery 770 Total Expenses?

7. Mark’s Repair Shop Income Statement Month Ended March 30 2014 Revenue Repairs Revenue9900 Total Revenue9900 Expenses Advertising 850 Delivery 770 Insurance 150 Rent2000 Salaries2600 Supplies 185 Utilities 235 Total Expenses6790 Net Income3110

8. Exercise 1 Prepare an income statement for the Law Office of Dewey, Cheetham and Howe for the month ended December 31 2013, using the following information: Fees $120 000Investment Income $32000 Salaries $12 750Rent $7600 Insurance $5000Advertising $3299 Office Expenses $2344 Transportation Expenses $5460 Promotion Expenses $3800

9. Law Office of Dewey, Cheetham and Howe Income Statement month ended December 31, 2013 Revenue Fees 120000.00 Investment Income 32000.00 Total Revenues 152000.00 Expenses Advertising 3299.00 Insurance 5000.00 Office 2344.00 Promotion 3800.00 Rent 7600.00 Salaries12750.00 Transportation 5460.00 Total Expenses 40253.00 Net Income111747.00

10. Exercise 2 Prepare an income statement for Brookfield Laundromat for the fiscal year ending June 30 2013. Select the necessary accounts from the ones listed below. (HINT: some of them would belong on a Balance Sheet) Cash $1212.70 Accounts Receivable $633 Laundry Supplies $651 Machinery/Equipment $13900 Trucks $27050 Accounts Payable $1746 Bank Loan $23000 A. Ottawa, Capital $21006.39 Sales $88932.29 Insurance $7171 Miscellaneous Expenses $225 Rent $22000 Telephone $574.25 Truck Repairs $8146.90 Utilities Expense $907.64 Wages $49908.50

11. Brookfield Laundromat Income Statement year ending June 30, 2013 Revenue Sales88932.29 Total Revenues 88932.29 Expenses Insurance 7171.00 Miscellaneous 225.00 Rent 22000.00 Telephone 574.25 Truck Repairs 8146.90 Utilities 907.64 Wages49908.50 Total Expenses 88933.29 Net Income (1.00)

12. Which Statement Is It? 1.Accounts Receivable 2.Cash 3.Telephone Expense 4.Loan 5.Supplies Expense 6.Sales 7.Lawyer Fees Charged 8.Accounts Payable 9.Land 10.Inventory to sell 11.Bank Charges 12.Miscellaneous 1.Balance Sheet 2.Balance Sheet 3.Income Statement 4.Balance Sheet 5.Income Statement 6.Income Statement 7.Income Statement 8.Balance Sheet 9.Balance Sheet 10.Balance Sheet 11.Income Statement 12.Income Statement