Max Is Having a Problem Understanding the Financial Statements

Essay

Max is having a problem understanding the financial statements.He believes that his administrative assistant has made some errors in preparing the income statement.Evaluate the following transactions and the income statement prepared by the administrative assistant.Prepare a corrected income statement using U.S.GAAP.
a.Max's Catering earned $10,000 in catering business during June.
b.Customers paid $2,500 in deposits for parties to be catered in July.
c.The business paid $500 for June rent.
d.The business paid the chef $5,000 in wages for June.
e.The business spent $3,300 on food,spices,and other ingredients,and used $1,500 of them during June.