Victoria Holmes registered as a financial adviser several years ago. An income statement for the current period, prepared using cash accounting, is presented below. GST is ignored.

	HOLMES’ FINANCIAL ADVISORY SERVICE Income Statement for the year ended 30 June 2017
	Income: Fees revenue Less: Expenses			$	380 000 305 000
	Profit			$	75 000

Additional data

(a) Fees for advice given for the year ended 30 June 2016 for $8000 were collected in the current year and are included above.

(b) Fees earned in the current year of $12 000 are expected to be collected in the following year. These have not been included above.

(c) Accrued salaries at 30 June 2016 and 2017 are $4000 and $4300, respectively.

(d) Depreciation expense of $18 000 is not included in the expenses.

(e) Victoria Holmes withdrew $2400 per month to cover personal living expenses.

Required

A. Using the above information, prepare an income statement on the accrual basis. Show all calculations.

B. Briefly explain why the revised statement could be considered a better measure of profit.

C. Is it a correct accounting procedure to exclude drawings from expenses? Explain why.