The following transactions are July activities of Craig’s Bowling, Inc. a. Craig

Question

The following transactions are July activities of Craig’s Bowling, Inc.

a. Craig’s collected $14,900 from customers for games played in July.

b. Craig's sold bowling merchandise inventory from its pro shop for $7,200; received $3,700 in cash and customers owed the rest on account. [The cost of goods sold (expense) related to these sales is $2,990.]

c. Craig’s received $2,000 from customers who purchased merchandise in June on account.

d. The men’s and ladies’ bowling leagues gave Craig’s a deposit of $3,000 for the upcoming fall season.

e. Craig’s paid $1,200 on the electricity bill for June (recorded as expense in June).

f. Craig’s paid $4,200 to employees for work in July.

g. Craig’s purchased $1,560 in insurance for coverage from July 1 to October 1. (Part is an expense for July and part is a prepaid expense to be used in future months.)

h. Craig’s paid $1,800 to plumbers for repairing a broken pipe in the restrooms.

i. Craig’s received the July electricity bill for $2,500 to be paid in August.

Prepare an income statement for Craig’s Bowling, Inc., for the month of July.

Explanation / Answer

Income Statement :-

Particulars Amount($) Amount($) Revenues :- Games Revenue 14900 Sales 7200 Unearned Revenue 3000 Total Revenue 25100 25100 Expense :- Electricity Bill - July (Outstanding) 2500 Salaries Expense 4200 Insurance Expense ($1560/3) 520 Repairing Expense 1800 Total Expense 9020 9020 Profit / (Loss) ($25100-$9020) 16080

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