Exercise 4-13 The income statement of Pharoah Company for the month of July show

Question

Exercise 4-13 The income statement of Pharoah Company for the month of July shows net income of $3,780 based on Service Revenue $8,460, Salaries and Wages Expense $3,090, Supplies Expense $960, and Utilities Expense $630. In reviewing the statement, you discover the following: 1. Insurance expired during July of $440 was omitted 2. Supplies expense includes $360 of supplies that are still on hand at July 31 3. Depreciation on equipment of $330 was omitted. 4. Accrued but unpaid wages at July 31 of $430 were not included 5. Service performed but unrecorded totaled $720 Prepare a correct income statement for July 2017.

Explanation / Answer

Prepare correct income statement :

Revenue Service revenue (8460+720) 9180 Expense Salaries and wages expense (3090+430) 3520 Supplies expense (960-360) 600 Utilities expense 630 Insurance expense 440 Depreciation expense 330 Total expense 5520 Net income 3660

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