70.2K

Verified Solution

Link Copied!

image

Big Blue Rental Corporation provides rental agent services to apartment building owners. Big Blue Rental Corporation's preliminary income statement for August 2022 and its August 31, 2022, preliminary balance sheet did not reflect the following: a. Rental commissions of $550 had been earned in August but had not yet been recelved from or billed to building owners. b. When supplies are purchased, their cost is recorded as an asset. As supplies are used, a record of those used is kept. The record sheet shows that $410 of supplies were used in August. c. Interest on the note payable is to be paid on May 31 and November 30 . Interest for August has not been accrued-that is, it has not yet been recorded. (The Interest Payable of $90 on the balance sheet is the amount of the accrued liability at July 31 .) The interest rate on this note is 10%. d. Wages of $310 for the last week of August have not been recorded. e. The Rent Expense of $1,170 represents rent for August, September, and October, which was paid early in August. f. Interest of $330 has been earned on notes receivable but has not yet been received. 9. Late in August, the board of directors met and declared a cash dividend of $3,300, payable September 10. Once declared, the dividend is a liability of the corporation until it is paid. Required: a. 1. Using the columns provided on the income statement for Big Blue Rental Corporation, make the appropriate adjustments or corrections to the statements, and enter the correct amount in the Final column. (Hint. Use the five questions of transaction analysis.) 2. Using the columns provided on the balance sheet for Big Blue Rental Corporation, make the appropriate adjustments or corrections to the statements, and enter the correct amount in the Final column. (Hint: Use the five questions of transaction analysis.) Complete this question by entering your answers in the tabs below. Using the columns provided on the income statement for Big Blue Rental Corporation, make the appropriate adjustments or corrections to the statements, and enter the correct amount in the Final column. (Hint: Use the five questions of transaction analysis.) Using the columns provided on the balance sheet for Big Blue Rental Corporation, make the appropriate adjustments or corrections to the statements, and enter the correct amount in the Final column. (Hint: Use the five questions of transaction analysis.) Note: Enter amounts in the Adjustments or Corrections columns as positive numbers. Net income Adjustments or Corrections: Please use the numbers from the Income Statement and enter amounts in both the Debit and Credit columns. Negative amount(s) should be indicated by a minus sign

Answer & Explanation Solved by verified expert

See Answer