The main section headings of the income statement are:

a. Sales

b. Fees earned

c. Other

d. Cost of goods sold

e. Operating expenses

f. Other expenses

REQUIRED:

Classify the following descriptions under the appropriate headings and prepare an income statement in proper form without account balances.

1. Office salary expense

2. Sales of services provided

3. Insurance expense

4. Sales of inventories

5. Salespeople commission expense

6. Depreciation expense

7. Office supplies expense

8. Loss on sale of equipment

9. Income from interest on savings account

10. Income from dividends on investments

11. Advertising expense

12. Loss on sale of building

13. Interest expense on outstanding loans

14. Cost of sold inventories

15. Gain on sale of short-term investments