Summarized operations for Splish Brothers Inc. for the month of July are as follows. Revenues recognized: for cash $30,000; on account $71,480. Expenses incurred: for cash $26,120; on account $41,220. Indicate for Splish Brothers Inc. (a) the total revenues, (b) the total expenses, (c) net income for the month of July.

Total revenue is $111,480

Total expenses is $67340

Net income $44140

Explanation:

Total revenue is a combination of cash and credit sales, which is calculated as follows:

Cash sales $30000

Credit sales $71480

Total sales $111,480

Total expenses could be determined by summing up the expenses paid for in cash and those incurred on account, calculation of which is shown below:

Cash expenses $26120

Expenses on account $41220

Total expenses $67340

Net income = total sales - total expenses

Net income = $111480-$67340

Net income = $44140

The rationale for including revenue and expenses on account is that accrual basis of accounting is being used, where revenue is recognized when earned and expenses when incurred.

a. Total Revenues are $ 101,480

b. Total expenses are $ 67,340

Net income for July is $ 34,140

Explanation:

Total Revenues is Cash revenue + Revenues on credit

$ 30,000 (cash) + $ 71,480 (on credit) = $ 101,480

Total expenses is Cash expenses + Expenses on account

$ 26,120 (cash) + $ 41,220 (on account) = $ 67,340

Net income = Total revenues - Total expenses

Net Income = $ 101,480 - $ 67,340 = $ 34,140