Task 3. Explain, with the net income / loss obtained how this figure would affect the capital account of the company. Answer:For the assignment use this Excel template. 1. Using the template and the following expanded Ledger accounts, create an Income Statement for Compu-Parts Inc (owner: Andrea Muldoon). Date the Income Statement for the year ended December 31st 20--. Be sure to place the accounts in the correct order and provide a correct format. Hint: Not all accounts will be used. 2. Use formulas to determine the Net Income/Net Lossof the fiscal period and the Total Revenues/Expenses. 3. Explain, with the Net Income/Loss obtained, how this figure would affect the Capital account of the company. Accounts Balances Accounts Balances Accounts Payable $31,255 Equipment $17,800 Accounts Receivable $7,540 Fees Earned $74, 175 Automobile $41,520 General Expense $3,985 Bank $31,600 Land $74,560 Beginning Capital $99,000 Loan Payable $21,500 Building $65,000 Mortgage Payable $32,480 Car Expense $13,600 Postage Expense $415 Commissions Earned $42,590 Rental Expense $7,640 Drawings $7,520 Wages Expense $29,820The Income Statement ROMA AIRLINES Income Statement Year ended December 31 2 - Revenue 3 [ Charter Flights $174,327 Flying Lessons 78,604 Total Revenues $252,931 Operating Expenses Advertising $ 503 Bank Interest and Charges 2,756 5 Building Maintenance 1.102 Gasoline and Oil 60,962 Insurance Expense 1,746 Licences Expenses 1,505 Light, Heat, and Water Expense 2.017 Miscellaneous Expense 312 Rent Expense 12,000 Repairs and Maintenance Expense 41,087 Telephone Expense 1,416 Wages 40,764 166.970 Net Income 85.961 1. The Heading gives the: . name of the business . name of the statement . accounting period for which the figures have been accumulated 2. The Revenue section shows an increase in equity resulting from the proceeds of the sale of goods or services in the ordinary course of business. The revenues are usually placed in alphabetical order. 3. Two types of revenue are shown in the statement for ROMA AIRLINES. 4. The Expense section shows decreases in equity resulting from the cost of the goods or services used to produce the revenue. The expenses are usually placed in alphabetical order. 5. Expenses are shown in detail. 6. The Net Income or Net Loss figure is shown. Net income is not cash. It is the difference between total revenues and total expenses. If the revenues are greater than the expenses a net income is the result. If total expenses are greater than total revenues, the company would suffer a net loss for the period