Question

Statement of Earning

Does it seem correct?

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 ( Peter's paid $6,300 to employees for work in October (9) 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. PETER'S CURLING INC. Statement of Earnings For the Month of October 2017 $ 29,000 (5,100) 23,900 Revenue Cost of sales Gross profit Expenses: Utilities Salaries Insurance Repairs 4,300 6,300 630 2,150 Earnings before income taxes Income tax expense Net earnings 13,380 10,520 3,156 7,364

Answer 1

Ans.

PETER'S CURLING INC
Statement of Earnings
For the month of October 2017
Revenues		$        21,900.00
Cost of sales		$         (5,100.00)
Gross Profit		$        16,800.00
Expenses
Utilities	$                 4,730.00
Salaries	$                 6,300.00
Insurance	$                    630.00
Repair	$                 2,150.00
Total Expense		$              13,810.00
Earnings before income taxes		$                 2,990.00
Income Tax Expense		$                    897.00
Net Income		$                 2,093.00

Revenue =$13,450 + $8,450 = $21,900

Cost of sales = $ 5,100

Utilities = $ 4,730 (Bill amount of October month)

Insurance = $ 1,890/3 = $630 (Taken only the amount of October month)

Income Tax Epense @ 30% = $ 2,990 * 30% = $897