The income statement of Gopitkumar Co. for the month of July shows net income of $3,000 based on Service Revenue $7,000, Salaries and Wages Expense $2,200, Supplies Expense $1,400, 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 at July 31. 3. Depreciation on equipment of $350 was omitted. 4. Accrued but unpaid salaries and wages at July 31 of $500 were not included. 5. Services performed but unrecorded totaled $700. Prepare a correct income statement for July 2017. Prepare a correct Income Statement for July, 2017.

Explanation:

Income Statement    

Calculations:

Service revenue = Service revenue+ Services performed but unrecorded = 7000+700 = 7700

Salaries and wages expense = Salaries and wages expense + Accrued but unpaid salaries and wages = 2200 + 500 = 2700

Supplies expenses = Supplies expenses - supplies that are still on hand = 1400 -350 = 1050

Income statement

Service revenue  7700  

Expenses:      

Salaries and wages expenses2700  

Supplies expenses  1050

Utilities expense  400  

Insurance expense  400  

Depreciation expenses350  

Total expenses  4900  

Net Income (7700-4900)  2800

Explanation:Adjustment entries

1. Debit utilities expenses $400

Credit bank/cash $400

2. Debit cash. $350

Credit supply expenses $350

3. Debit depreciation. $350

Credit accumulated dep $350

4. Debit accrued salaries. $500

Credit salaries nd wages. $500

5. Debit bank $700

Services. $700

Adjusted Income Statement

Revenue $7,700

Less:

Salaries nd wages. $2,700

Suppliers expenses. $1,050

Utilities expenses. $800

Depreciation. $350

Net income. $800