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patriot [66]
2 years ago
9

A company had calculated net income to be $77,850 based on the unadjusted trial balance. The following adjusting entries were th

en made for: Salaries and wages owed but not yet paid of $820 Interest earned but not received from investments of $780 Prepaid insurance premiums amounting to $580 have expired Unearned revenue in the amount of $780 has now been earned.
Business
1 answer:
ICE Princess25 [194]2 years ago
3 0

Answer:

Adjusted net income will be $78,010

Explanation:

According to the Accrual concept all the accrued expenses should be recognized and deducted from the unadjusted net income and all the earned revenues should be recognized and added to unadjusted net Income.

Salaries and wages owed but not yet paid of $820 is an expense which is accrued but not been paid it should be recorded and deducted from the unadjusted net income as earlier expenses were understated.

Interest earned but not received from investments of $780 is the revenue recognized but not been received until now. Accrual Concept requires that when revenue is realized it should be recognized into the accounting records. So it should be added to the net income.

Prepaid insurance premiums amounting to $580 have expired is actually an accrued expense which previously recorded as prepaid expense. It should be deducted from the net income as it is a expense which need to be recognized.

Unearned revenue in the amount of $780 has now been earned. Now it should be added to the net income because it is a revenue item that should be recognized as it is recorded as unearned revenue earlier.

Net income to be $77,850 based on the unadjusted trial balance.

Adjusted Net Income = $77,850 - $820 + $780 - 580 + 780 = $78,010

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All the following are benefits of attending a community college except that
KengaRu [80]

Answer:

its easier to receive a bachelor's degree there.

5 0
3 years ago
Daybook Inc. budgeted production of 403,500 personal journals in 20Y6. Paper is required to produce a journal. Assume six square
Phantasy [73]

Answer:

Direct Materials    = $969,000

Direct Labor     = $699,400

Factory overhead    = $214,600

WIP       = $2,200

Finished Goods            = ($2,000)

Cost of Goods      = $1,883,200

Explanation:

Direct Materials  = $969,000

403,500 x 6 square yards = 2,421,000

2,421,000 + (40,400 - 38,900)  = 2,422,500

2,422,500 x 0.40 per square yard = $969,000

Direct Labor  = $699,400

403,500 personal journals

403,500 * 8 minutes  = 3,228,000 minutes

3,228,000/60 minutes  = 53,800

53,800 x $13.00 = $699,400

Prepare a cost of goods sold budget for Daybook Inc. using the information above

Direct Materials        = $969,000

Direct Labor         = $699,400

Factory overhead        = $214,600

WIP  ($16,500 - $14,300)     = $2,200

Finished Goods ($28,000 - $30,000)    = ($2,000)

Cost of Goods         = $1,883,200

6 0
3 years ago
A strong internal control system will reduce the amount of substantive testing that must be performed.A ) True B ) False
Doss [256]

Answer:

A) True

Explanation:

The internal control structure deals with the rules, laws, procedures, practices that vary from company to company that are necessary to attain an organization's goals and objectives.

The substantive testing is an audit process aimed at checking the accuracy and reliability of the financial statements. To check if the financial statements are free from any errors, mistakes, fraud, etc. that can change users' decisions.

The financial statements should be relevant, reliable and finalize in all respects.

Therefore, a strong internal system will reduce the quantity of substantive testing required.

4 0
3 years ago
Cavern Company's output for the current period results in a $5,250 unfavorable direct material price variance. The actual price
lisov135 [29]

Answer:

3,500 pounds

Explanation:

By applying the below formula we get:

AQ(AP-SP)

USD 5,250 (unfavorable price variance )

USD 5,250/(AP - SP) = AQ

So,

USD 5,250/(USD 56.50 - USD 55.00)

= 3,500

4 0
2 years ago
AC Corporation has beginning inventory of $9,049, accounts payable of $7,212, and accounts receivable of $6,333. The end of year
labwork [276]

Answer:

The AC Corporation takes 46 Days average to pay back its accounts payable.

Explanation:

Average Accounts Payable = $7863.5

Cost of Goods Sold = $63,008

Number of Days in Accounting Period = 365

Days Payable Outstanding = (Average Accounts Payable / Cost of Goods Sold) x Number of Days in Accounting Period

Days Payable Outstanding = ($7,863.5 / $63,008) x 365

Days Payable Outstanding = 45.55

Therefor, the company takes an average of 46 days to pay back its accounts payable.

3 0
3 years ago
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