How To Prepare An Income Statement For The Year Ended

For example an income statement may cover any one of the following time periods.

How to prepare an income statement for the year ended. When you re ready let s begin. An income statement is an accounting document that summarizes the net profit or loss of a company by subtracting the expenses from the income. Here is an example of how to prepare an income statement from paul s adjusted trial balance in our earlier accounting cycle examples. Prepare a balance sheet as of june 30.

B prep are a balance sheet as at 31. The following additional information is available. In this video video you will learn how to build an income statement in excel with data for any company. On the basis of the end of period spreadsheet journalize the closing entries for a compound transaction if a box does not require an entry leave it blank.

To prepare an income statement generate a trial balance report calculate your revenue determine the cost of goods sold calculate the gross margin include operating expenses calculate your income include income taxes calculate net income and lastly finalize your income statement with business details and the reporting period. Examples of service businesses are medical accounting or legal practices or a business that provides services such as plumbing cleaning consulting design etc. We will be using the adjusted trial balance from this lesson. Xyz company income statement for the year ending dec.

Single step income statement. A single step income statement is a format of income statement which uses just a single subtraction i e. Adjusted trial balance if you want you may take a look at how an income statement looks like here before we proceed. The income statement format above is a basic one what is known as a single step income statement meaning just one category of income and one category of expenses and prepared specifically for a service business.

This statement should serve to give you the basic layout and an idea of how a profit loss statement or income statement works. A prepare income statement for the year ended 31 december 2014. Year ended may 31 five months ended may 31 quarter ended may 31 month ended may 31 or five weeks ended may 31 a sample income statement in the single step format would look like this. In this tutorial we will prepare an income statement of a sole proprietorship service type business using information from previous lessons.

The following balances are taken from the books of george anderson at the end of his first year trading on 31 december 2014. Prepare an income statement for the year ended june 30. Inventory at 31 december 2014 was valued at 4500. Prepare a statement of owner s equity for the year ended june 30 no additional investments were made during the year.

The income statement summarizes the results of a firm.