Issued stock for $6 cash (example). b. purchased equipment costing $6,320, paying $4,893 in cash and charging the rest on account. c. paid $513 in principal and $91 in interest expense on long-term debt. d. earned $88,988 in sales revenue; collected $87,949 in cash with the customers owing the rest on account. e. incurred $10,766 in shipping expenses, all on credit. f. paid $28,241 cash on accounts owed to suppliers. g. incurred $4,332 in marketing expenses; paid cash. h. collected $620 in cash from customers paying on account. i. borrowed $6,359 in cash as long-term debt. j. used inventory costing $62,752 when sold to customers. k. paid $177 in income tax recorded as an expense in the prior year.

                      Cash DR  $6

                              To Common Stock $6

(Being Shares issued for cash)

                 EquipmentDR $6320

                      To Cash $4893

                      To Accounts Payable $1427

(Being Equipment Purchased partly for cash and partly on credit)

                  Long Term Debt $513

                 Interest Expense$91

                          To Cash $604

(Being Loan Installment repaid)

                  CashDR  $87949

                  Accounts ReceivableDR $1039

                           To Sales$ 88988

(Being sales made partly in cash and partly on credit)

                Shipping Expense DR $10766

                  To Accounts Payable$10766

(Being Shipping Expenses Incurred)

              Accounts PayableDR $28241

                     to Cash $28241

(Being Accounts Payables Paid off)

              Marketing ExpensesDR $4332

                         To Cash $4332

(Being Marketing Expenses incurred)

               CashDR $620

                   To Accounts Receivable$620

(Being Accounts Receivables Paid off)

             CashDR $6359

                   To Long term Debt $6359

(Being Long Term Debt Borrowed)

                Cost of Goods SoldDR $62752

                       To Merchandise Inventory$62752

(Being Cost of Goods sold Recorded)

                Income tax PayableDR $177

                  To Cash$177

(Being Tax Payable Paid off)

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.