E1-10 Analyzing and Interpreting an Income Statement 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: Revenues Service Revenue Sales Revenue Total Revenues Expenses 2. 3. Supplies Expense Salaries and Wages Expense Advertising Expense Office Expense Total Expenses Net Income CHAPTER 1 Business Decisions and Financial Accounting LO 1-2, 1-3 PEST AWAY CORPORATION Income Statement For the Year Ended December 31 $192,000 24,000 216,000 76,000 33,000 22,000 46,000 177,000 $ 39,000 Required: 1. Did the company generate more revenue from selling goods or providing services to customers? If salaries and wages were to double, how much net income would the company report? If the company paid $20,000 of its advertising expense during the current year, what amount is owed for advertising at the end of the year? In what account would the amount still owing

1. Did the company generate more revenue from selling goods or providing services to customers? 2. If salaries and wages were to double, how much net income would the company report? 3. If the company paid $20,000 of its advertising expense during the current year, what amount is owed for advertising at the end of the year? In what account would the amount still owing be reported? 4. Would the $10,000 of dividends be reported on the balance sheet or statement of retained earnings? E1-11 Matching Cash Flow Statement Items to Business Activity Categories Tech Data Corporation is a leading distributor of computer peripherals and network solutions. The following items were taken from its recent cash flow statement. Mark each item in the following list with a letter to indicate whether it is a cash flow from Operating, Investing, or Financing activities. Put parentheses around the letter if it is a cash outflow and use no parentheses if it's an inflow. 1. Cash paid to suppliers and employees 2. Cash received from customers 3. Cash received from borrowing using a long-term note 4. Cash received from issuing stock 5. Cash paid to purchase equipment E1-12 Matching Cash Flow Statement Items to Business Activity Categories The Coca-Cola Company is one of the world's leading manufacturers, marketers, and distributors of nonalcoholic beverage concentrates and syrups, producing more than 500 beverage brands. Mark each item in the following list with a letter to indicate whether it is a cash flow from Operating, Investing, or Financing activities. Put parentheses around the letter if it is a cash outflow and use no parentheses if it's an inflow. 1. Purchases of equipment 2. Cash received from customers