Question 2 PIERSON MARKETING AGENCY Income Statement Month Ended June 30 $28,000 Revenues Contract revenues .................... Expenses Salary expense.......... Advertising expense .... Rent expense...... Depreciation expense.... Total expenses... Profit $6,000 800 4,200 2.800 13.800 $6,800 Additional data: When the income statement was prepared, the company accountant neglected to take into consideration the following information: 1. A utility bill for $2,000 was received on the last day of the month for electric and gas service for the month of June. 2. A company sold and completed work on a marketing campaign for a client. The $28,000. The agency billed the client for the contract but has not yet been paid. 3. Supplies on hand at the beginning of the month were $3,000. The agency purchased additional supplies during the month for $2,500 in cash and $2,200 of supplies were on hand at June 30. 4. The agency purchased a new car at the beginning of the month for $16,800 cash. The car is expected to have a useful life of four years. 5. Salaries owed to employees at the end of the month total $5,300. The salaries will be paid on July 5. Instructions Prepare a correct income statement