Question

1) Create a Multi-step Income Statement for the Month of June. Assume a 35% Tax rate

Date Entry Post Ref. Credit Debit 70,000 101 307 70,000 128 12,240 101 12,240 25,000 25,000 155 153 101 12,000 12,500 24,500 131 3,600 101 3,600 June Cash Common Stock (to record investment) Prepaid Insurance Cash (to record prepayment of insurance) Cash Accounts Payable (to record loan) Rafts Trucks Cash | (to record purchase of Rafts and Truck) Prepaid Rent Cash (to record prepayment of rent 3 months) Unearned Guiding Revenue Cash (to record payment for services not yet performed) FlyRod Inventory Accounts Payable (to record purchase of inventory on account) Supplies for guides Cash (to record purchase of supplies) No entry Cash Guiding Revenue (to record Services performed) Cash Store Sales (to record the sale of a Flyrod) 10 Cash 236 5,000 5,000 1,200 1,200 125 300 300 500 500 1,600 1,600 101 2,500

Answer 1

	Income Statement
	Revenues
	Guiding Revenue			$ 5,950.00
	Sales Revenue			$ 2,400.00
	Total Revenue				$ 8,350.00
Less:	Expenses
	Advertising Expense			$      60.00
	Depreciation Expense - Truck			$    183.33
	Depreciation Expense - Raft			$    333.33
	Insurance Expense			$    510.00
	Repair Expense			$    200.00
	Rent Expense			$ 1,200.00
	Wages Expense			$ 2,450.00
	Telephone Expense			$    150.00
	Total Expenses				$ 5,086.66
	Income before tax				$ 3,263.34
Less:	Income Tax @ 35%				$ 1,142.17
	Net Income				$ 2,121.17