What was the net income for the month? Prepare an abbreviated income statement to support your work.
The adjusted trial balance of Fargo Company as of July 31, 2017 is presented below. (Read that again, think about what that means about where Fargo is in the accounting cycle.) Notice that the total debits and credits for each account are indicated, including the beginning balances, rather than the usual account balance. For example, the cash account had transactions which resulted in a total of $67,900 debits (including the beginning balance) and a total of $59,600 credits. All adjusting entries have been made for the month of July 2017, except the adjustment for inventory. Fargo's fiscal year end is June 30.
Account Debit Credit
Cash $67,900 $59,600
Accounts Receivable $58,000 $54,400
Allowance for Doubtful Accounts $700 $1,100
Inventory $60,000
Prepaid Advertising $1,200
Office Supplies on Hand $1,700
Office Equipment $22,000
Accumulated Depreciation $400
Accounts Payable $31,900
Salaries Payable $400
Interest Payable $31,900
Dividends Payable $400
Notes Payable $31,900
Common Stock $400
Additional Paid-In Capital $31,900
Retained Earnings $400
Sales $19,900
Sales Returns $61,000
Sales Discounts $2,200
Purchases $500
Purchase Returns and Allowances $42,000
Purchase Discounts $900
Salaries Expense $400
Office Supplies Expense $9,200
Insurance Expense $1,300
Advertising Expense $700
Bad Debt Expense $600
Miscellaneous Expense $500
Depreciation Expense $400
Interest Expense $300
Loss on Sale of Office Equipment $300
Totals $313,000 $313,000