Lesson 4
Adjusting Accounts for Financial Statement
Exercise
David Company has the following information at the year-end for the preparation of adjusting entries:
Of the $10000 balance in unearned revenue,$7000 has been earned.
The annual building depreciation is $20000.
Services provided to customers at the last day of the year unbilled totally 35000.
Rent of 3000 for the Dec,is unpaid and unrecorded.
The utility bill for the month of Dec,was received but is unpaid,$2800.
Required:
Prepare the required adjusting entries at Dec,31.
2,End of period adjustments(effect on net income
Before making any year-end adjusting entries,the revenue of Hichy exceeded expenses by $567,000,However,the following adjustments are necessary:
a Office supplies used,$800.
b Services rendered to clients but not yet billed,$7500
c Interest accrued on notes payable,$4000.
d Depreciation,$15000.
e Accrued wages payable,$5600
f Fees collected in advance which have now been earned,$9,500.
g Corporation is subject to income taxes of33% of income before income taxes.
Required:
Complete the following schedule to determine the net income of hichy after these adjustments have been recorded,Show the effect of each adjustment in the space provided,Compute net income after adjustments and place answer in space provided.
Income before adjusting entries 567000
adjustments:
a.
b.
c
d
e
f
g
Net income after adjustments,
Adjusting Accounts for Financial Statement
Exercise
David Company has the following information at the year-end for the preparation of adjusting entries:
Of the $10000 balance in unearned revenue,$7000 has been earned.
The annual building depreciation is $20000.
Services provided to customers at the last day of the year unbilled totally 35000.
Rent of 3000 for the Dec,is unpaid and unrecorded.
The utility bill for the month of Dec,was received but is unpaid,$2800.
Required:
Prepare the required adjusting entries at Dec,31.
2,End of period adjustments(effect on net income
Before making any year-end adjusting entries,the revenue of Hichy exceeded expenses by $567,000,However,the following adjustments are necessary:
a Office supplies used,$800.
b Services rendered to clients but not yet billed,$7500
c Interest accrued on notes payable,$4000.
d Depreciation,$15000.
e Accrued wages payable,$5600
f Fees collected in advance which have now been earned,$9,500.
g Corporation is subject to income taxes of33% of income before income taxes.
Required:
Complete the following schedule to determine the net income of hichy after these adjustments have been recorded,Show the effect of each adjustment in the space provided,Compute net income after adjustments and place answer in space provided.
Income before adjusting entries 567000
adjustments:
a.
b.
c
d
e
f
g
Net income after adjustments,
