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Income statement examples

Checked for updates, April 2022.


The results of operations of a company is summarized in the income statement. The income statement presents all revenues and all expenses. Revenues minus expenses is equal to net income. The net income is the bottom line measure of a company's financial performance for a particular period.

Here are examples of the income statement.

The amounts are assumed and contents are simplified for illustration purposes.

Example 1: Service Business

XYL Graphic Designs, Inc.
Income Statement
For the Year Ended December 31, 2021
Service Revenue     $ 270,000
Less: Expenses      
  Salaries Expense $ 80,000    
  Rent Expense 30,000    
  Advertising Expense 16,000    
  Utilities Expense 10,000    
  Depreciation Expense 8,000    
  Supplies Expense 2,000   146,000
Income before Tax     $ 124,000
Less: Income Tax Expense     48,360
Net Income     $  75,640

The income statement starts with a heading made up of three lines. The heading contains: (1) the name of the company, (2) the title of the financial statement, and (3) the period covered by the report.

The income statement of a service type business is quite simple. Revenue accounts are presented first followed by all of the company's expenses. The resulting amount is then subjected to income tax. Note: Income tax treatment depends upon the tax laws of the state/country.

Some income statements of service businesses present "Cost of Service" in a separate line after revenues. It shows the expenses that are directly associated with the services rendered.

Example 2: Merchandising/Manufacturing Business

GHI Market Associates Corporation
Income Statement
For the Year Ended December 31, 2021
Sales     $ 960,000
Less: Cost of Sales     680,000
Gross Profit     $ 280,000
Less: Operating Expenses      
  Selling Expenses      
    Sales Salaries Expense $ 40,000    
    Advertising Expense 15,000    
    Utilities Expense - Store 6,000    
    Depreciation Expense - Store 5,000    
    Store Supplies Expense 4,000   $ 70,000
  Administrative Expenses      
    Office Salaries Expense $ 22,500    
    Utilities Expense - Office 6,500    
    Depreciation Expense - Office 5,000    
    Permits and Licences 4,000    
    Office Supplies Expense 2,500    
    Bad Debts Expense 1,500   42,000
  Total Operating Expenses     $  112,000
Operating Income     $ 168,000
Other Revenues and Expenses    
  Gain on Sale of Equipment $ 20,000    
  Interest Expense (12,000)   8,000
Income before Tax     $ 176,000
Less: Income Tax Expense     68,640
Net Income     $ 107,360

Example 2 shows how an income statement of merchandising and manufacturing businesses would look like. In the above example, a separate line for "Cost of Sales" is presented. It shows the cost of the products sold, hence also known as "Cost of Goods Sold".

Selling expenses were shown separately from administrative expenses. Selling expenses pertain to expenses directly related to the selling and marketing functions. Administrative expense pertain to those associated with the activities of the administration such as billing and collection, hiring, board meetings, etc.

The difference between all revenues and all expenses is then subjected to income tax to arrive at the company's net income.


Though they may be presented differently, all income statements have the same goal and purpose. An income statement presents a company's revenues and expenses over a particular period of time, to provide the users information about the operating performance of the company. When studying company figures, it is good to compare income statements over different periods or with income statements of other similar companies.

Key Takeaways

An income statement provides information regarding the "results of operations" of a business, or otherwise known as "financial performance".

In the above, you learned more about the income statement through examples for a service business and a merchandising/manufacturing business.

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