Assume you are the manager of your own Internet Service Provider. You have just one employee, who you pay $95.00 a day. You pay this employee every Friday.
You are baffled, however, when you observe that your net income for the month of June is lower than your net income for the month of May, even though your revenue in June was greater than in May. Your confusion is compounded by the fact that your expenses for this service firm remain constant from month to month.
The Income Statements for May and June, as well as the calendars for these two months, are presented below. After you have inspected these documents, answer the questions that follow.
For the Month Ended May 31, 1997
For the Month Ended June 30, 1997