Dyer, Inc., completed its first year of operations on December 31, 2018. Because this is the end of the annual accounting period, the company bookkeeper prepared the following preliminary income statement:
Income Statement, 2018
Rent Revenue $114,000
Expenses:
Salaries and Wages Expense $28,500
Repairs and Maintenance Expense 13,000
Rent Expense 9,000
Utilities Expense 4,000
Travel Expense 3,000
Total Expenses 57,500
Income $56,500
You are an independent CPA hired by the company to audit the firmâs accounting systems and financial statements. In your audit, you developed additional data as follows:
a. Wages for the last three days of December amounting to $310 were not recorded or paid.
b. The $400 telephone bill for December 2018 has not been recorded or paid.
c. Depreciation of equipment amounting to $23,000 for 2018 was not recorded.
d. Interest of $500 was not recorded on the notes payable by Dyer, Inc.
e. The Rental Revenue account includes $4,000 of revenue to be earned in January 2019.
f. Supplies costing $600 were used during 2018, but this has not yet been recorded.
g. The income tax expense for 2018 is $7,000, but it wonât actually be paid until 2019.
Required:
Prepare, in proper form, an adjusted income statement for 2018.
Answers: 2
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