Astromech Travel Court was organized on July 1, 2013, by Jessica Browning. Jessi

Question

Astromech Travel Court was organized on July 1, 2013, by Jessica Browning. Jessica is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Jessica prepared the following income statement for her fourth quarter, which ended June 30, 2014. Jessica suspected that something was wrong with the statement because net income had never exceeded $30,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. You first look at the trial balance. In addition to the account balances reported above in the income statement, the trial balance contains the following additional selected balances at June 30, 2014. You then make inquiries and discover the following. Prepare any adjusting journal entries required at June 30, 2014. Prepare a correct income statement for the quarter ended June 30, 2014.

Explanation / Answer

Revenues Rent Revenue 159189 Operating Expense Advertisement Expense 4000 Supplies 7264 Insurance 3630 Salaries and wages expense 85506 Interest expense 156 Income Tax expense 13953 utilities expense 1154 Deprecation expense 2776 Maintenance and repair expense 8724 total operating expense 127163 Net Income 32026

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