Retail Income Statement Tonya’s Diveshop had the following cash receipts and payments during July:

A review of the supporting documents indicates the following:

a. Customers must pay for all diving equipment on a sameday-as-purchase basis.

b. One-third of the diving equipment purchased in July is still on hand at July 31 and is expected to be sold in August at normal prices.

c. Salaries and wages are paid in full on the last day of the month,

d. The building the store is located in is owned by Tonya and has five large apartments on the upper floors. Rent of $1,600 covering the months of July and August was collected in advance on July | on each of the apartments.

e. Depreciation of $2,500 per month on the building is considered appropriate.
Prepare an income statement for Tonya’s Diveshop for July in accordance with generally accepted accounting principles.

Transcribed Image Text:

Sale of diving equipment Purchase of diving equipment for sale Salary and wage payments Receipts from apartment rentals Heat, light, and power used in July Summer advertising campaign $100,000 90,000 18,000 8,000 3,200 4,200