Peter’s Curling Inc. operates several curling centres (for games and equipment sales). The following transactions occurred in the month of October. |
(a) | Peter’s collected $13,450 from customers for games played in October. |
(b) | Peter’s sold $8,450 in curling equipment inventory; received $5,300 in cash and the rest on account; cost of sales is $5,100. |
(c) | Peter’s received $3,300 from customers on account who purchased merchandise in September. |
(d) | The curling league gave Peter’s a deposit of $3,800 for the upcoming fall season. |
(e) | Peter’s paid $4,300 for the September electricity bill and received the October bill for $4,730 to be paid in November. |
(f) | Peter’s paid $6,300 to employees for work in October. |
(g) | Peter’s purchased $1,890 in insurance for coverage from October 1 to December 31. |
(h) | Peter’s paid $2,150 to plumbers for repairing a broken pipe in the washrooms. |
Prepare a statement of earnings for Peter’s Curling Inc. for the month of October 2017. Use an income tax rate of 30 percent. |
Income Statement (October) | ||
Revenue | ||
Games Revenue | $ 13,450 | |
Sales Revenue | $ 8,450 | |
Total Revenue | $ 21,900 | |
Expenses | ||
Cost of Sales | $ 5,100 | |
Electricity Expense | $ 4,730 | |
Salaries Expense | $ 6,300 | |
Insurance Expense | $ 630 | |
Repair Expense | $ 2,150 | |
Total Expenses | $ 18,910 | |
Income before taxes | $ 2,990 | |
Income tax @30% | $ 897 | |
Net Income | $ 2,093 |
Insurance expense for October = $1890/ 3 = $630
Statement of Retained Earnings | |
Beginning Balance | $ - |
Add: Net Income | $ 2,093 |
$ 2,093 | |
Less : Dividends | $ - |
Ending Balance | $ 2,093 |
Peter’s Curling Inc. operates several curling centres (for games and equipment sales). The following transactions occurred...
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