90.2K

Verified Solution

Link Copied!

The following information is available for Drake Company, which adjusts and closes its accounts every December 31; 1. Salaries accrued but unpaid total $2,840 on December 31. 2. The 5247 December utility bill arrived on December 31 and has not been paid or recorded. 3, Buildings with a cost at $78,000. 25-year lrfe, and $9,000 regidual value are to be depreciated; equipment with a cost of $44,000, 8-year life, and $2,000 residual value is also to be depreciated The straight-line method is to be used A A count of supplies indicates that the Store Supplies account should be reduced by $128 and the Oice Supplies account reduced by $397 for > supplies used during the year. 5. The company holds a $6,000, 12% (annual rate), 6month note receivable dated September 30, from a customer The interest is to be collected on the maturity dates 6. Bad debts expense is estimated to be 1% of annual sales. Sales total $65,000 7. An analysis 0! the company insurance polimes indicates that the Prepaid Insurance account is to be reduced for $528 of expired insurance. 8. A review of travel expense reports indicates that $310 has been paid for airfare for a saiesperson (and recorded as Travel Expenses), but has not yet been used, 9. The income tax rate is 30% on current income and Will be paid in the first quarter of next year The pretax income of the company before adiustments is $18,270. .i mums.- u'am

Answer & Explanation Solved by verified expert

See Answer