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1 December, 16:23

The income statement of Blossom Company for the month of July shows net income of $3,310 based on Service Revenue $7,210, Salaries and Wages Expense $2,220, Supplies Expense $960, and Utilities Expense $720. In reviewing the statement, you discover the following: 1. Insurance expired during July of $470 was omitted. 2. Supplies expense includes $250 of supplies that are still on hand at July 31. 3. Depreciation on equipment of $250 was omitted. 4. Accrued but unpaid wages at July 31 of $320 were not included. 5. Service performed but unrecorded totaled $710. Prepare a correct income statement for July 2014.

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  1. 1 December, 16:25
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    Answer

    Blossom Company

    Income Statement

    for the month of July

    $ $

    Revenues (1) 7,920

    Salaries and Wages Expense (2) 2,540

    Supplies Expense (3) 710

    Insurance expense (4) 470

    Depreciation Expenses (5) 250

    Utilities Expense 720

    Total expenses 4,690

    Adjusted Net Income 3,230

    Explanation

    1. Revenues

    Revenues per question $ 7,210

    Unrecorded services (Note 5 in question) $ 710

    Adjusted revenues $ 7,920

    2. Salaries and wages Expense

    Salaries and wages expenses per question $ 2,220

    Accrued wages not included (Note 4 in question) $ 320

    Adjusted Salaries and wages Expense $ 2,540

    3. Supplies Expense

    Supplies Expenses per question $ 960

    Supplies on hand to be adjusted (Note 2 in quest,) $ (250)

    Adjusted Supplies Expenses $ 710

    4. Insurance expired to be expenses (Note 1 in quest, $ 470

    5. Depreciation to be recorded (Note3 in question) $ 250
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