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.

Question

Sloane Robbins

Business

21 April, 16:52

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)

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Julien Shields · Answer 1

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

Ricardo Flynn · Answer 2

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