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3 December, 17:49

The income statement of Gopitkumar Co. for the month of July shows net income of $3,000 based on Service Revenue $7,000, Salaries and Wages Expense $2,200, Supplies Expense $1,400, and Utilities Expense $400. In reviewing the statement, you discover the following. 1. Insurance expired during July of $400 was omitted. 2. Supplies expense includes $350 of supplies that are still on hand at July 31. 3. Depreciation on equipment of $350 was omitted. 4. Accrued but unpaid salaries and wages at July 31 of $500 were not included. 5. Services performed but unrecorded totaled $700. Prepare a correct income statement for July 2017. Prepare a correct Income Statement for July, 2017.

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Answers (2)
  1. 3 December, 20:54
    0
    Explanation:Adjustment entries

    1. Debit utilities expenses $400

    Credit bank/cash $400

    2. Debit cash. $350

    Credit supply expenses $350

    3. Debit depreciation. $350

    Credit accumulated dep $350

    4. Debit accrued salaries. $500

    Credit salaries nd wages. $500

    5. Debit bank $700

    Services. $700

    Adjusted Income Statement

    Revenue $7,700

    Less:

    Salaries nd wages. $2,700

    Suppliers expenses. $1,050

    Utilities expenses. $800

    Depreciation. $350

    Net income. $800
  2. 3 December, 21:09
    0
    Income Statement

    Calculations:

    Service revenue = Service revenue + Services performed but unrecorded = 7000+700 = 7700

    Salaries and wages expense = Salaries and wages expense + Accrued but unpaid salaries and wages = 2200 + 500 = 2700

    Supplies expenses = Supplies expenses - supplies that are still on hand = 1400 - 350 = 1050

    Income statement

    Service revenue 7700

    Expenses:

    Salaries and wages expenses 2700

    Supplies expenses 1050

    Utilities expense 400

    Insurance expense 400

    Depreciation expenses 350

    Total expenses 4900

    Net Income (7700-4900) 2800
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