Still more questions from Anne Marie.

1. I bought and paid for equipment costing $20,000. Shouldnt there be an equipment expense for $20,000 on the income statement?

Please respond in your own words to this or this question?

Anne's Beauty Salon, Inc
Income Statement
For the Year 20XX
Sales (Revenue)	$125,000.00
Cost of Goods Sold	25,000.00
Gross Profit	100,000.00
Payroll Expense	67,500.00
Sales, General, Administrative Expense	5,000.00
Rent Expense	1,400.00
Utilities Expense	1,670.00
Insurance Expense	500.00
Depreciation Expense	2,500.00
Total Operating Expense	78,570.00
Total Operating Income	21,430.00
Income Taxes	6,430.00
Net Income	$15,000.00

Anne's Beauty Salon, Inc
Statement of Retained Earnings
For the Month Ending December 31, 20XX
Retained Earnings, December 1	$5,000.00
Add: Net Income	15,000.00
Subtract: Dividends	(2,402.50)
Retained Earnings, December 31	$17,597.50

Anne's Beauty Salon, Inc
Balance Sheet
At December 31, 20XX
Assets			Liabilities
Current Assets			Current Liabilities
Cash		$949.50	Accounts Payable	$5,000.00
Accounts Receivable		11,948.00	Unearned Revenue	200.00
Supplies		20,500.00	Total Current Liabilities	5,200.00
Prepaid Rent		8,400.00
Prepaid Insurance		6,000.00
Total Current Assets		47,797.50	Note Payable	15,000.00
Equipment	$25,000.00		Total Liabilities	20,200.00
Less: Accumulated			Stockholders' Equity
Depreciation	(5,000.00)	20,000.00	Common Stock	30,000.00
Total Long-Term Assets			Retained Earnings	17,597.50
Total Assets		$67,797.50	Total Liabilities and	$67,797.50
			Stockholders' Equity