When Sandra Michaelss father took seriously ill suddenly, Sandra had just completed the semester in college, so she stepped in to run the family business, ASAP Couriers, until it could be sold. Under her fathers direction, the company was a successful operation and provided ample money to meet the familys needs. Sandra was majoring in biology in college and knew little about business or accounting, but she was eager to do a good job of running the business so it would command a good selling price. Since all of the services performed were paid in cash, Sandra figured that she would do all right as long as the Cash account increased. Thus, she was delighted to watch the cash balance increase from $34,702 at the beginning of the first month to $91,719 at the end of the second monthan increase of $57,017 during the two months she had been in charge. When she was presented an income statement for the two months by the companys bookkeeper, she could not understand why it did not show that amount as income but instead reported only $38,354 as net income. Knowing that you are taking an accounting class, Sandra brings the income statement, shown below, to you and asks if you can help her understand the difference.

ASAP COURIERS Income Statement Months of June and July, 20X1
Operating Revenues
Delivery Fees				$	261,200
Operating Expenses
Salaries and Related Taxes	$	171,684
Gasoline and Oil		24,281
Repairs Expense		7,767
Supplies Expense		3,148
Insurance Expense		3,360
Depreciation Expense		12,606
Total Operating Expense					222,846
Net Income				$	38,354

In addition, Sandra permits you to examine the accounting records, which show that the balance of Salaries Payable was $2,457 at the beginning of the first month but had increased to $5,137 at the end of the second month. Most of the balance in the Insurance Expense account reflects monthly insurance payments covering only one month each. However, the Prepaid Insurance account had decreased $229 during the two months, and all supplies had been purchased before Sandra took over. The balances of the companys other asset and liability accounts showed no changes. Required: