Question

Before month-end adjustments are made, the February 28 trialbalance of Bose's Enterprise contains revenue of $11,000 andexpenses of $7,600. Adjustments are necessary for the followingitems:A. Depreciation for February is $1,200.B. Revenue earned but not yet billed is $2,800.C. Accrued interest expense is $800.D. Revenue collected in advance that is now earned is $2,500.E. Portion of prepaid insurance expired during February is$500.Calculate the correct net income for Bose's Enterprise forFebruary 3.

Answer 1

Answer:

$2,800      

Explanation:

REVENUE

Revenue                                                                       $11,000

Add:

B.    Revenue earned but not yet billed = $2,800

D. Unearned revenue noe earned         = $2,500      $5,300  

Total Adjusted Revenue                                              $16,300  

EXPENSES

Expenses                                                                       $11,000

Add:

A.   Depreciation for February                  = $1,200.

C. Accrued interest expense                    =   $800    

E. Prepaid insurance                                  =   $500     $2,500      

Total Adjusted expenses                                                $13,500  

Correct net income = Total Adjusted Revenue - Total Adjusted expenses  

                                 = $16,300 - $13,500

                                 = $2,800