Income statement
or Profit and loss statement

Here is a sample income statement of a service type sole proprietorship business. We've named the company Carter Printing Services. All amounts are assumed and simplified for illustration purposes.

Income Statement Example

Carter Printing Services
Income Statement
For the Year Ended December 31, 2021
Service Revenue $ 160,000
Less: Expenses
Salaries Expense $ 40,000
Supplies Expense 26,100
Rent Expense 20,500
Utilities Expense 11,300
Depreciation Expense 5,000 102,900
Net Income $ 57,100

Explanation and Pointers

  1. An income statement shows the net income or net loss of a business. This is achieved by deducting all expenses from all income.
  2. A typical income statement starts with a heading which consists of three lines. The first line presents the name of the company; the second describes the title of the report; and the third states the period covered in the report.
  3. Notice that the third line is worded "For the Year Ended. " This means that the income statement presents information for a specific span of time. In the above example, the period covers 1 year that ends on December 31, 2021. Hence, the amounts presented in the report are income and expenses from January 1, 2021 to December 31, 2021.

Statement of Comprehensive Income

International reporting standards now required a Statement of Comprehensive Income rather than just an Income Statement.

The Income Statement may be presented in a separate report and another report for Statement of Comprehensive Income can be prepared to show the additional other comprehensive income.

Carter Printing and Publishing, Inc.
Statement of Comprehensive Income
For the Year Ended December 31, 2021
Net Income $ 57,100
Other Comprehensive Income
Revaluation Surplus $ 20,000
Unrealized Gain 10,200 30,200
Total Comprehensive Income $ 87,300

Alternatively, the computation of income statement and other comprehensive income can all be presented in only one report.

Carter Printing and Publishing, Inc.
Statement of Comprehensive Income
For the Year Ended December 31, 2021
Service Revenue $ 160,000
Less: Expenses
Salaries Expense $ 40,000
Supplies Expense 26,100
Rent Expense 20,500
Utilities Expense 11,300
Depreciation Expense 5,000 102,900
Net Income $ 57,100
Other Comprehensive Income
Revaluation Surplus $ 20,000
Unrealized Gain 10,200 30,200
Total Comprehensive Income $ 87,300
Key Takeaways

The income statement presents an entity's revenues and expenses, and the resulting net income or net loss. This lesson presented an Income Statement example and cited important points in preparing and understanding the said report.