Question

Equipment costing $37,200 is purchased at the beginning of the year for cash. Depreciation on the equipment is $6,200 per year. On June 30, the company lends its chief financial officer $42,000; principal and interest at 5% are due in one year. On October 1, the company receives $12,800 from a customer for a one-year property insurance policy. Deferred Revenue is credited. Required: Indicated by how much net income in the income statement is higher or lower if the adjustment is not recorded. (Do not round intermediate calculations.)

Answer 1

Answer:

$16000

Explanation: