The income statement of Cullumber Company for the month of July shows a net income of $2,490 based on Service Revenue $7,100, Salaries and Wages Expense $2,930, Supplies Expense $920, and Utilities Expense $760. In reviewing the statement, you discover the following:

1. Insurance expired during July of $490 was omitted.

2. Supplies expense includes $240 of supplies that are still on hand at July 31.

3. Depreciation on equipment of $180 was omitted.

4. Accrued but unpaid wages at July 31 of $360 were not included.

5. Service performed but unrecorded totaled $790.

Prepare a correct income statement for July 2014.

Question

Business

Stella Berger

3 July, 13:48

The income statement of Cullumber Company for the month of July shows a net income of $2,490 based on Service Revenue $7,100, Salaries and Wages Expense $2,930, Supplies Expense $920, and Utilities Expense $760. In reviewing the statement, you discover the following:

1. Insurance expired during July of $490 was omitted.

2. Supplies expense includes $240 of supplies that are still on hand at July 31.

3. Depreciation on equipment of $180 was omitted.

4. Accrued but unpaid wages at July 31 of $360 were not included.

5. Service performed but unrecorded totaled $790.

Prepare a correct income statement for July 2014.

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Answers (1)

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Khloe Gibson · Answer 1

Net income $ 2940

Explanation:

Cullumber Company

Income Statement

For the month of July 2014

1) Service Revenue $7,890,

Salaries and Wages Expense $2,930,

2) Supplies Expense $680,

Utilities Expense $760.

3) Insurance Expense $ 490

4) Depreciation Expense $ 180

Net income $ 2940

Accrued but unpaid wages at July 31 of $360 were not included. They are accruals and will be included in the Balance Sheet. They are the liabilities. Service performed but unrecorded totaled $790 are added in the month performed. Supplies still on hand are deducted from supplies Expense. Insurance Expense is included. Depreciation Expense is included.