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Exercise 5. INCOME STATEMENT
PBF’S is a digital services provided company. Here you have different elements of PBF’S
financial statements during 2018:
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ELEMENTS
OPERATING EXPENSE
Interest expenses
38,000
OPERATING REVENUE
Service revenues
128,000
CURRENT ASSET
Supplies
42,000
CURRENT ASSET
Money
50,000
OPERATING EXPENSE
Ad expenses
40,000
OPERATING EXPENSE
Rent expenses
24,000
NON-CURRENT ASSET
Software
26,000
OPERATING EXPENSE
Wages paid
48,000
a) Check and explain the non-correct elements of PBF’s Income statement.
Supplies
Money
Software
42,000
50,000
26,000
They belongs to balance sheet.
b) Complete the format of PBF’s Income statement.
PBF
Income statement
2018
Service revenues
128,000
Wages paid
(48,000)
Ad expenses
(40,000)
Rent expenses
(24,000)
OPERATING RESULTS
=16,000
Financial revenues
0
Interest expenses
(38,000)
FINANCIAL RESULTS
(38,000)
NET INCOME
(22,000)
Operating income is positive but financial results are negative. The companys should revise its
way of financing but it is doing well the business because operating results are positive.