The Adjusted Trial Balance of Allen's Automotive Service Company on June

question 171

Essay

The adjusted trial balance of Allen's Automotive Service Company on June 30, 2010 includes the following accounts: Repair Supplies, $300; Accumulated Depreciation, $8,500; Wages Payable, $550, Note Payable $5,000; Repair Revenue, $22,100; Salaries Expense, $5,750; Depreciation Expense, $2,250; Repair Supplies Expense, $1,000; Rent Expense, $400; Utilities Expense, $350; and Interest Expense $250. Prepare an income statement for the month of June.

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Definitions:

Consumer Surplus

The disparity between the amount consumers propose to pay for a good or service and the amount they finally pay.

Profits

The financial gain obtained when the revenue from business activities exceeds the costs and expenses incurred in operating the business.

Price Discrimination

An approach where the same goods or services, either identical or very similar, are priced differently by the same seller in distinct markets.

Inelastic Demand

A situation where the demand for a good or service changes little when its price changes, indicating consumers' lack of sensitivity to price adjustments.