Income Statement Other Revenue

Here is an example of how to prepare an income statement from paul s adjusted trial balance in our earlier accounting cycle examples.

Income statement other revenue. For example a manufacturer of washing machines earns rental income from sub leasing unused office space to a third party. It treats these. The income statement comes in two forms multi step and single step. Cogd 300 000 gross profit 200 000.

Revenue and other income are segregated. Income statement provides a summary of all the revenues and the expenses over the time period in order to ascertain the profit or loss of the company and the example of which includes income statement prepared by a company xyz ltd. Revenue also known as gross sales is often referred to as the top line because it sits at the top of the income statement. Single step income statement.

The income statement tracks both revenue which is money coming into a business and expenses which is the money that goes out. So for example in case of a manufacturer of electronic appliances revenue will comprise of the sales from electronic appliance business. Income or net income is a company s total earnings or profit. As you can see this example income statement is a single step statement because it only lists expenses in one main category.

The main observations would be the following. Revenue includes income earned from the principal activities of an entity. This rental income would be classified as other income on the company s income statement other types of income that are commonly classified as other income are interest income. The statement displays the company s revenue costs gross profit selling and administrative expenses other expenses and income taxes paid and net profit in a coherent and logical manner.

For example during the year the company make revenue usd500 000 cost of sales usd300 000 and other income usd5 000 then the extract p l of the company is as following. The income statement summarizes a company s revenues and expenses over a period either quarterly or annually. Other income 1 000. Cfi s free accounting fundamentals course.

Revenue arises from sale of goods and sale of services and return for the use of entity s resource by others in the form of royalty dividend and interest are presented as other income. Other income is income derived from activities unrelated to the main focus of a business.