Marilyn Johnson, Attorney at Law

Income Statement

For Month Ended January 31, 2019

Revenue: Legal Fees Earned $ 4,000.00

Expenses: Salary Expense $ 1,500.00

Rent Expense 600.00

Utilities Expense 250.00

Total Expenses 2,350.00

Net Income: $ 1,650.00

Based on the income statement for Marilyn Johnson, Attorney at Law, please answer the following questions.

1. In your own words based on the income statement that is above, please explain the purpose and function of the income statement.

2. According to the statement, is Ms. Johnsons income higher than her expenses; is her income lower than her expenses; or is her income equal to her expenses? Please explain your answer with examples from the income statement.

3. Calculate the percentage share of each type of expense in total expenses (The share of salary expense, the share of rent expense and the share of utilities expense). Which expense has the highest share?

4. Are there any expenses that she can eliminate so that her income could be higher and her expenses lower? If so, which expenses can she eliminate and how can she eliminate them? Use examples from the income statement.

5. What would you suggest to Ms. Johnson to increase her revenue? Give specific examples that will work for Ms. Johnson as an attorney.