Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Burnley solution manual

                             Statement of Income
For the month of July, 2xxx
 
               Service revenue                                                  $ 171,430
               Wages expense                      $ 49,860
               Advertising expense                14,610
               Supplies expense                       25,629
               Operating expenses                     3,460
               Utilities expense                        1,532
               Total expenses                                                      95,091
               Net income                                                            $ 76,339
 
b.  Other costs Michelle might have incurred in July that were  
     not listed above include:
 
1.      Depreciation expense of tents and rafting equipment
2.      Income tax expenses
3.      Interest expense on any outstanding loans
4.  Insurance expense
5.  Other employee benefit costs such as employer portion of CPP and EI
 
LO 5  BT: AP  Difficulty: E Time: 20 min.  AACSB: None  CPA: cpa-t001  CM: Reporting
 
 

AP1-14A
 
a.                 Item                                                Classification
Loan owed to bank                      Liability 
Common shares                       Shareholders’ equity 
Vehicles                                 Asset 
Ski equipment                         Asset 
Amount prepaid by customers  
for February trips                      Liability 
Retained earnings                           Shareholders’ equity  
Prepaid Accommodations           Asset