E1-10 Analyzing and Interpreting an Income Statement [LO 1-2, LO 1-3] Three individuals organized Pest Away Corporation on January 1 to provide insect extermination services. The company paid dividends of $10,000 during the year. At the end of the first year of operations, the following income statement was prepared: PEST AWAY CORPORATION Income Statement For the Year Ended December 31 Revenues Service Revenue $ 192,000 Sales Revenue 24,000 Total Revenues $ 216,000 Expenses Supplies Expense Salaries and Wages Expense Advertising Expense Office Expense 76,000 33,000 22,000 46,000 Total Expenses $ 177,000 $ 39,000 Net Income Required: 1. Did the company generate more revenue from selling goods or providing services to customers? Selling goods Providing services to customers 2. If salaries and wages were to double, how much net income would the company report? Net Income 3-a. If the company paid $20,000 for advertising during the current year, what amount is owed at the end of the year? Amount Owed 3-b. In what account would the amount still owing be reported? Accounts Payable Accounts Receivable Advertisement Outstanding Expense 4. Would the $10,000 of dividends be reported on the balance sheet or statement of retained earnings? Balance Sheet Statement of Retained Earnings