Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. during the course of your examination of the finan

During the course of your examination of the financial statements of a company for the...

60.1K

Verified Solution

Question

Accounting

During the course of your examination of the financial statements of a company for the year ended December 31, Year 1, you discover net income in Year 1 is $45,000 but no adjusting entries have been prepared. To prepare adjusting entries, you discover the following items: An insurance policy covering three years was purchased on January 1, Year 1, for $8,100. The entire amount was debited to insurance expense. During Year 1, the company received a $975 cash advance from a customer for services to be provided in Year 2. The $975 was credited to sales revenue. All purchases of supplies were debited immediately to supplies expense. However, you discover that supplies costing $1,075 were on hand on December 31. The company borrowed $30,000 from a local bank on October 1, Year 1. Principal and interest at 12% will be paid on September 30, Year 2. No accrual was recorded for interest. Required: Determine the proper amount of net income for Year 1. Note: Amounts to be deducted should be indicated by a minus sign.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

Orman Company produces neon-colored covers for tablets (e.g., iPads). For last year, Orman reported the following: Work-in-process...

Biology
1.2K views

Aging Brain.pdf Actions 2) Address the following questions in your discussion board post: What are some reasons that brain...

Basic Math
1.2K views

A doctor prescribes 250 mg of a drug The amount of the drug in the...

Basic Math
1.2K views

The system 7x 35 y x 4y 5x 25 y has the solution x 20...

Calculus
1.2K views

Find the exact area below the curve y x 2 x and above the x...

Accounting
1.2K views

Before Gordon Corporation engages in the treasury stock transactions listed below, its...

Accounting
1.2K views

please use FASB codification citations to support your answer. C1-1 Assignment of...

Accounting
1.2K views

Rev. Carla Fitzgerald is a full-time minister. The church allows her to use a parsonage...

Accounting
1.2K views

Business Context The advent of e-news, or electronic news, portals has offered us a great...

Accounting
1.2K views

The master budget at Western Company last period called for sales of 226,000 units at...

Finance
1.2K views

QUESTION 4 Percula Farms raises marine fish for sale in the aquarium trade. Each year,...

Accounting
1.2K views

Question Multifactor productivity: a) remains constant b) is never constant c) usually uses substitutes as...