The adjusted trial balance for China Tea Company at December 31, 2018, is presen

Question

The adjusted trial balance for China Tea Company at December 31, 2018, is presented below: Debit Credit Cash 12,100 Accounts receivable 166,000 Prepaid rent 6,600 Inventory 41,000 Equipment 460,000 Accumulated depreciation - equipment 141,000 Accounts payable 46,000 Notes payable - due in three months 46,000 Salaries payable 5,600 Interest payable 2,600 Common stock 280,000 Retained earnings 85,200 Sales revenue 560,000 Costs of goods sold 260,000 Salaries expense 136,000 Rent expense 31,000 Depreciation expense 46,000 Interest expense 3,600 Advertising expense 4,100 Totals 1,166,400 1,166,400 Required: Prepare an income statement for China Tea Company for the year ended December 31, 2018.

Explanation / Answer

Income statement for China Tea Company For the year ended December 31, 2018 Sales Revenue 560000 Less- Costs of goods sold 260,000 Salaries expense 136,000 Rent expense 31,000 Depreciation expense 46,000 Interest expense 3,600 Advertising expense 4,100 480700 Net Profit 79300

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