Mello, Inc., sells home-spa equipment to customers. Its fiscal year ends this mo
ID: 2574756 • Letter: M
Question
Mello, Inc., sells home-spa equipment to customers. Its fiscal year ends this month. The following transactions occurred this year: Purchased $78,000 of new home-spa massage equipment inventory; paid $20,000 in cash and owed the rest on account. Paid employees $18,500 in wages for work during the year; an additional $3,150 for current year wages will be paid at the end of the first week of next month. . · Sold massage equipment to customers for $164,000; received $38,000 in cash and the rest on account. The cost of the equipment was $82,000 Paid $12 cash for utilities for this year. $1,350 in utility bills for this year remain unpaid. Received $759 from customers as deposits on orders of new home-spa equipment to be delivered to the customers next year Using the accrual basis of accounting, what would Mello, Inc report as current year income?Explanation / Answer
Sales Revenue 164000 Expenses: Cost of goods sold 82000 Wages expense 21650 Utilities expense 1362 105012 Net income 58988