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Maynard Company
Income Statement
For Month of June
Particulars Total($
Sales Revenue 70925
Cost of Goods Sold 39345
Supplies Expenses 600
Wage Expenses 5888
Utilities Expenses 900
Depreciation Expenses(building and equipment 2574
Insurance Expenses 324
Miscellaneous Expenses p35
Income tax expenses p524
!
"
2
$
% $
: Net income for a
particular period is the difference between the sales revenue and (cost of the good sold
+ operating expenses + income taxes . It does not matter if business got the cash for
revenues or did not pay for the purchases/operating expenses/income taxes during the
period when these were realized. These unpaid expenses/accrued wages/ accounts
payable and accounts receivable will be shown in the balance sheet as per the nature
but income sheet.
For example in June month Maynard Company got the $20,865 cash from bank loan but
it will not be shown in the income sheet but balance sheet as liability. Same goes for the
other transactions also resulting in the difference between net income and increased
cash during June period.
a $p4,p75 ʹ this was the just cash purchase of merchandise but the cost of
sales is (inventory Opening ʹ inventory closing + inventory purchased both
cash and on account . So we will not just take $p4,p75 as cost of sale.
b $36,030 ʹ this was just the inventory purchase both on cash and credit but
did not include the difference of inventory ope ning and closing so we can not
take it as cost of sales either.