The Reality Insurance Agency prepares monthly financial statements. Presented below is an income statement for the month of June that is correct on the basis of information supplied.
Additional data: When the income statement was prepared, the agency accountant neglected to take into consideration the following information:
1. An electricity invoice for $2,000 was received on the last day of the month for electric and gas service for the month of June.
2. A company insurance salesman sold a life insurance policy to a client for a premium of $28,000. The agency invoiced the client for the policy and is entitled to a commission of 20%.
3. Supplies on hand at the beginning of the month were $3,000. The agency purchased additional supplies during the month for $2,500 in cash and $2,200 of supplies were on hand at 30 June.
4. The agency purchased a new car at the beginning of the month for $16,800 cash. The car will depreciate $4,200 per year.
5. Salaries owed to employees at the end of the month total $5,300. The salaries will be paid on July 5.
Prepare a corrected income statement.

Question

The Reality Insurance Agency prepares monthly financial statements. Presented below is an income statement for the month of June that is correct on the basis of information supplied.
  Additional data: When the income statement was prepared, the agency accountant neglected to take into consideration the following information:
1. An electricity invoice for $2,000 was received on the last day of the month for electric and gas service for the month of June.
2. A company insurance salesman sold a life insurance policy to a client for a premium of $28,000. The agency invoiced the client for the policy and is entitled to a commission of 20%.
3. Supplies on hand at the beginning of the month were $3,000. The agency purchased additional supplies during the month for $2,500 in cash and $2,200 of supplies were on hand at 30 June.
4. The agency purchased a new car at the beginning of the month for $16,800 cash. The car will depreciate $4,200 per year.
5. Salaries owed to employees at the end of the month total $5,300. The salaries will be paid on July 5.
Prepare a corrected income statement.

Quizplus · Accepted Answer

The Answer of The Reality Insurance Agency prepares monthly financial statements. Presented below is an income statement for the month of June that is correct on the basis of information supplied.
  Additional data: When the income statement was prepared, the agency accountant neglected to take into consideration the following information:
1. An electricity invoice for $2,000 was received on the last day of the month for electric and gas service for the month of June.
2. A company insurance salesman sold a life insurance policy to a client for a premium of $28,000. The agency invoiced the client for the policy and is entitled to a commission of 20%.
3. Supplies on hand at the beginning of the month were $3,000. The agency purchased additional supplies during the month for $2,500 in cash and $2,200 of supplies were on hand at 30 June.
4. The agency purchased a new car at the beginning of the month for $16,800 cash. The car will depreciate $4,200 per year.
5. Salaries owed to employees at the end of the month total $5,300. The salaries will be paid on July 5.
Prepare a corrected income statement.

The Reality Insurance Agency Prepares Monthly Financial Statements