Question

The income statement of Cullumber Company for the month of July shows 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 $340 of supplies that are still on hand at July 31.
3. Depreciation on equipment of $240 was omitted.
4. Accrued but unpaid wages at July 31 of $400 were not included.
5. Service performed but unrecorded totaled $730.
Prepare a correct income statement for July 2017.

Answer 1

Answer and Explanation:

The correct income statement for July 2017 is shown below:-

Cullumber Company

Income Statement

For the month of July

Particulars Amount

Service Revenue $7,830

($7,100 + $730)

Expenses

Salaries and Wages Expense $6,930

($2,930 + $400)

Supplies Expense $580

($920 - $340)

Utilities Expense $760

Insurance Expense $490

Depreciation Expense $240

Total expense $9,000

Net loss $1,170