Income Statement
Let’s prepare the income statement so we can inform how Cheesy Chuck’s performed for the month of June (remember, an income statement is for a period of time). Our first step is to determine the value of goods and services that the organization sold or provided for a given period of time. These are the inflows to the business, and because the inflows relate to the primary purpose of the business (making and selling popcorn), we classify those items as Revenues, Sales, or Fees Earned. For this example, we use Revenue. The revenue for Cheesy Chuck’s for the month of June is 14,167 containers of popcorn at $6 each, what is our revenue?
Next, we need to show the total expenses for Cheesy Chuck’s. Because Cheesy Chuck’s tracks different types of expenses, we need to add the amounts to calculate total expenses. Cost of Goods (COG) $2.83 / unit of popcorn. What is gross profit? Other operating expenses includes, wages, $10,700, lease $24,000, $3,200, advertising, $900, miscellaneous $300. What is total operating expenses? What is income before taxes?
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