3.15 : Income Statement: Income

Income on an income statement represents the revenues and gains a company earns in a specific accounting period.

Revenues primarily come from core business activities, such as sales of goods or services.

Gains are the profits from other activities, like selling an asset at a price higher than the book value, interest income, and insurance settlements.

Consider a confectionary company, Salt Corporation, for the year twenty twenty-three.

The primary revenue is earned through sales of cakes, breads, cookies, and cream rolls, amounting to seven hundred thousand dollars.

Additionally, the bakery takes custom cake orders for events like weddings, earning two hundred thousand dollars.

It offers weekend baking classes, earning an additional ninety thousand dollars.

The corporation received an insurance settlement for a damaged baking machine for ten thousand dollars in the year.

The total income for Salt Corporation for the year is one million dollars, indicating the company's earning capacity and operational success.

Salt Corporation will try to increase its income to have higher profitability.