Practice problems:

Q-1 Prepare the Income Statement from the following information:

Service revenue 19,000

Depreciation expense 700
Wages expense 600
Rent expense 2,000
Supplies expense 1,200
Utilities expense 500
Repairs expense 600
Telephone expense 750

Solution:

Income Statement
For Year Ended December 31, 2020
Revenue:

Expenses:

Profit
Q-2 Prepare statement of changes in equity from the following information:

Capital at the beginning of the year = 100,000

Capital introduced during the year = 50,000

Profit made during the year = 10,000

Withdrawals made by the owner = 5,000

Solution:

Statement of Changes in Equity

For Year Ended December 31, 2020
Capital, Jan 1
Add:
Introduced during the year
Profit
Total
Less: Withdrawals by owner
Capital, Dec 31