service company income statement

Service companies have the most basic income statement of all the types of companies. Since service based companies do not sell a product, the income statement will not contain cost of goods sold. Therefore, the income statement will be a basic breakdown of income and expenses.

Begin with income. Then subtract all operating expenses. The difference between income and operating expenses is operating income. In this case, all expenses are period costs. There are no product costs associate with a service company.

Service income statement

In this example, I have indented all of the operating expenses. This allows the reader to easily see the individual operating expenses. The operating expenses in this case were listed from largest to smallest. That makes it easy for the users of the statement to see the largest expenses and those that make the biggest impact on the bottom line without having to search for them.

The total operating expenses have been pushed out to the third column to show the reader that the $80,200 has been subtracted from the $100,000 to obtain operating income of $19,800. Use underlining in your spreadsheet to show that a computation is being performed.

The service company income statement is very basic. Just remember the basic formula for income statements: Revenue – Expenses = Operating income.

Share This:

Related pages

how to compute income tax expensepresent value interest factor of an annuitytn paycheck calculatorhow to calculate weighted average gradewhat is wip accountingcalculate state withholdingcalculate contribution margin per unithow to calculate bond premium amortizationfifo calculatorpresent value chart $1journal entry for account payablejournal entry for sale of inventorypresent value interest factor annuity tablehow to find notes payableactivity based overhead rate formulaprepaid asset definitionmachine hour rate calculationaccrued liabilities journal entrypohrfifo calculation formulanexus payabledeprecadjusting entry definitionbookkeeping to trial balance examplesoverheads allocationaccounts payable debit balancecalculate variable expensesdeferred revenue journal entriesbalance sheet with accumulated depreciationrental income journal entryending inventory budgetnett pay calculatoraccrued service revenue journal entrywhats a fixed costexamples of a fixed expenseinterest payable journal entrycalculate gross salaryaccounting equation chartaccrued expense adjusting entrypurchase returns and allowances debit or creditbudgeting managerial accountingcurrent liabilities equationactivity based costingsstockholders equity accountingwrite off account receivablework in progress accounting entriesstraight line method of depreciation formulajournal entries for dividendsoffice supplies expense accountingjournalize adjusting and closing entriesretaining earnings formulaadjusting entries problemssample trial balance worksheetperpetual inventory system formulawip in accountingintroduction to accounts payablecalculate direct materialsredemption of bonds payablea prt formulawhat is the difference between direct labor and indirect laborsample projected income statementa record in the accounting equation is calledfind the present value of an ordinary annuity calculatorlist of all assetshow to calculate manufacturing overhead applied to work in processcalculate target costaccruals journal entrieshow to compute gross profit marginbank loan accounting entriescheckbook reconciliationlifo fifo examplesaccrual adjusting entrieswhat is fixed expensepurpose of statement of retained earnings