The Tree Doctors Provide Tree Spraying Services In The Compa

The Tree Doctors Provide Tree Spraying Services In The Companys Home C The Tree Doctors provide tree spraying services in the companys home county. Ivan Roof, the owner, incurred the following operating cost for the month of August 2012. The tree doctors earned $22,000.00 in revenues for the month of August by spraying trees totaling 25,000 feet in height. Operating costs included salaries and wages, chemicals, depreciation on truck, depreciation on building and equipment, supplies expense, and gasoline and utilities.

To prepare the income statement for August 2012, we will organize the revenues and expenses, calculate net income, and determine the ratios of total operating expense to total revenue and operating income to total revenue.

Paper For Above instruction Income Statement for The Tree Doctors The Tree Doctors Income Statement For the Month Ended August 31, 2012 Revenues: $22,000.00 Operating Expenses: Salaries and Wages $7,000.00 Chemicals $4,300.00 Depreciation on Truck $550.00 Depreciation on Building and Equipment $1,000.00

Supplies Expense $700.00 Gasoline and Utilities $1,410.00 Total Operating Expenses $15,960.00 Net Income $6,040.00 Calculation of Ratios Total Operating Expense to Total Revenue Ratio: Operating Expenses / Revenue = $15,960 / $22,000 ≈ 0.7245 or 73% Operating Income to Total Revenue Ratio: Net Income / Revenue = $6,040 / $22,000 ≈ 0.2745 or 27% Conclusion The income statement shows that The Tree Doctors generated a revenue of $22,000 in August 2012, with total operating expenses amounting to approximately $15,960, resulting in an operating income of $6,040.

The ratios indicate that about 73% of revenue was consumed by operating expenses, leaving approximately 27% as operating profit. These metrics provide insight into the company's cost structure and profitability for the month.

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