To prepare an income statement for EHB Ltd. for the year ended 30 June 2020, we need to categorize the accounts into revenue and expense categories. Then, we can calculate the net income by subtracting the total expenses from the total revenues.
Revenue:
Sales revenue $ 1,300,000
Interest income $ 2,000
Gain on sale of plant $ 26,000
Rental income $ 2,000
Royalty income $ 10,000
Other revenue $ 1,000
Total Revenue: $ 1,341,000
Expenses:
Cost of sales $ 820,000
Interest on borrowings $ 33,000
Sundry borrowing costs $ 1,000
Research expense $ 51,000
Advertising expense $ 25,000
Sales staff salaries $ 97,000
Amortisation of patents $ 7,000
Freight out $ 32,000
Shipping supplies $ 16,000
Depreciation on sales equipment $ 5,000
Administrative salaries $ 72,000
Legal and professional fees $ 13,000
Office rent expense $ 30,000
Insurance expense $ 14,000
Depreciation of office equipment $ 16,000
Stationery and supplies $ 5,000
Miscellaneous expenses $ 2,000
Income tax expense $ 31,000
Total Expenses: $ 1,260,000
Net Income: $ 81,000
Therefore, the income statement for EHB Ltd. for the year ended 30 June 2020 is as follows:
Revenue:
Sales revenue $ 1,300,000
Interest income $ 2,000
Gain on sale of plant $ 26,000
Rental income $ 2,000
Royalty income $ 10,000
Other revenue $ 1,000
Total Revenue: $ 1,341,000
Expenses:
Cost of sales $ 820,000
Interest on borrowings $ 33,000
Sundry borrowing costs $ 1,000
Research expense $ 51,000
Advertising expense $ 25,000
Sales staff salaries $ 97,000
Amortisation of patents $ 7,000
Freight out $ 32,000
Shipping supplies $ 16,000
Depreciation on sales equipment $ 5,000
Administrative salaries $ 72,000
Legal and professional fees $ 13,000
Office rent expense $ 30,000
Insurance expense $ 14,000
Depreciation of office equipment $ 16,000
Stationery and supplies $ 5,000
Miscellaneous expenses $ 2,000
Income tax expense $ 31,000
Total Expenses: $ 1,260,000
Net Income: $ 81,000