Sweeney & Allen, a large marketing firm, adjusts its accounts at the end of each

Question

Sweeney & Allen, a large marketing firm, adjusts its accounts at the end of each morth. The folloing Information is available for the year ending December 31 1 A bank loan had been obtalned on December 1. Accrued Interest on the loan at December 31 amounts to $1190. No Interest expense has yet been recorded. 2 Degrecaton of the frm's office building ts based on an estimated life of 30 years. The buiding was purchased four years ago for $360,000 3 Accrued, but unbilled, revenue during December amounts to $69.000. 4 On March 1, the firm pald $1,900 to renew a 12-month Insurance policy. The entire amount was recorded as Prepald Insurance. 5. The firm receved $15.000 from King Biscult Company in advance of developing a six-month marketing campaign. The entire amount was Initally recorded as Unearned Revenue. At December 31, $3.300 had actually been earned by the firm. 6 The company's policy is to pay ts employees every Friday Since December 31 fell on a Wednesday, there was an accrued lability for salarnes amounting to $2400 a. Record the necessary adjusting journal entries on December 31. b. By how much did Sweeney & Allen's net income increase or decrease as a result of the adjusting entries performed in part ignore income taxeE below. Complete this question by entering your answers in the tabs Required A Required B Record the necessary adjusting journal entries on December 31. (f no entry s required for a transection event select No joumel entry shole doliar) required in the firat account feld. Do not round intermedlate ca culations. Round your answers to the nearest Journal entry worksheet

Explanation / Answer

31-Dec Interest Expense 1190     Interest payable 1190 31-Dec Depreciation Expense: Building 1000 =360000/360       Accumulated Depreciation: Building 1000 31-Dec Accounts Receivable 69000      Rendered Revenue 69000 31-Dec Insurance Expense 158 =1900/12*1      Prepaid Insurance 158 31-Dec Unearned Revenue 3300       Revenue Earned 3300 31-Dec Salaries Expense 2400      Salaries Payable 2400 B Net income = (69000+3300)-(1190+1000+158+2400)= $67552

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