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.

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

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.