Question

Exercise 4. Read the information and make up the corresponding income
statement.
Mr. and Mrs. Rayburn are thinking of buying a cafe ´ from their old
acquaintance Mrs. Grace Harris. The cafe ´ operated one winter season. It was
not very successful and its owner decided to sell it. An experienced accountant
was invited to prepare an income statement which would show Mr. and Mrs.
Rayburn how profitable operations had been, and thus help them to judge
whether it was worthwhile to continue operating the cafe ´.
The cash received from customers throughout the season amounted to
$13,130. The owner paid herself $4,300 and her employees’ wages were $1,330.
She paid interest on the loan ($150). During this period the cafe ´ bought $2,650
worth of food and drinks supplies. Telephone and electricity bills amounted to
$860 and rent payments $3,000.

Answer 1

Ответ:

Income Statement for the Winter Season of the Cafe ´

Revenue:

Cash received from customers: $13,130

Expenses:

Cost of goods sold:

Food and drink supplies: $2,650

Operating expenses:

Wages expense: $1,330

Telephone and electricity bills: $860

Rent expense: $3,000

Interest expense: $150

Total Expenses: $7,990

Net Income: $5,140

Explanation:

The revenue for the winter season of the cafe ´ is $13,130, which is the amount of cash received from customers throughout the season.

The cost of goods sold is the amount spent on food and drink supplies, which is $2,650.

The operating expenses include wages expense, which is $1,330, telephone and electricity bills, which amount to $860, rent expense, which is $3,000, and interest expense, which is $150.

The total expenses are $7,990, which is the sum of cost of goods sold and operating expenses.

The net income is $5,140, which is calculated by subtracting the total expenses from the revenue.

Объяснение: