Your Friend Owns a Small Business Supplying Restaurants with Fresh

Short Answer

Your friend owns a small business supplying restaurants with fresh, organically grown produce. She prepares her own financial statements and has asked you to review the income statement she prepared for the financial year ended 30 June 2019:
As an experienced accountant, you review the statement and determine the following facts:
1. Sales include $5,000 of deposits from customers for future sales orders.
2. Other revenues contain two items: interest expense $2,000 and interest revenue $2,650.
3. Selling expenses consist of sales salaries $38,000; advertising $5,000; depreciation on storage equipment $3,750; and sales commissions expense $3,250.
4. Administrative expenses consist of office salaries $9,500; electricity expense $4,000; rent expense $8,000; and insurance expense $3,500. Insurance expense includes $600 of prepaid insurance.
5. Financial expenses consist of $500 bank charges.
Required: Prepare a corrected fully classified income statement. You do not need to calculate income taxes.