E1-7 preparing an income statement [lo 1-2]home realty, incorporated, has been operating for three years and is owned by three investors. j. doe owns 60 percent of the total outstanding stock of 9,000 shares and is the managing executive in charge. on december 31, the following financial items for the entire year were determined: sales revenue, $221,000; salaries and wages expense, $108,000; interest expense, $7,400; advertising expenses, $9,575; and income tax expense, $19,600. also during the year, the company declared and paid the owners dividends amounting to $14,000.prepare the company’s income statement.

Explanation:

In the income statement, the total revenues and the total expenses are recorded.  

If the total revenues are more than the total expenditure then the company earns net income

And, If the total revenues are less than the total expenditure then the company have a net loss

This net income or net loss would reflect in the statement of the retained earning account.  

The preparation of the income statement is presented in the spreadsheet. Kindly find the attachment below:

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.