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4 March, 23:01

The income statement of Cullumber Company for the month of July shows a net income of $2,600 based on Service Revenue $6,000, Salaries and Wages Expense $2,000, Supplies Expense $1,000, 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 on July 31.

3. Depreciation on equipment of $350 was omitted.

4. Accrued but unpaid salaries and wages on July 31 of $500 were not included.

5. Services performed but unrecorded totaled $700. Prepare a correct income statement for July 2017.

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  1. 4 March, 23:05
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    The preparation correct income statement for July 2017 is presented below:

    Cullumber Company

    Income statement

    For the month of July

    Revenue

    Service revenue $6,700 ($6,000 + $700)

    Total revenues $6,700 (A)

    Less: Expenses

    Salaries and Wages Expense $2,500 ($2,000 + $500) =

    Supplies Expense $650 ($1,000 - $350)

    Utilities Expense $400

    Insurance expense $400

    Depreciation expense $350

    Total expenses $4,300 (B)

    Net income $2,400 (A - B)
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