X Company prepares monthly financial statements. The following transactions occu
ID: 2599282 • Letter: X
Question
X Company prepares monthly financial statements. The following transactions occurred during January: 1. On January 1, a one-year store rental lease was signed for a total of $48,000, and rent for the first 2 months was paid in advance. 2, on January 1, equipment was purchased for $60,000 with a downpayment of S6,000 and a note for the remainder. The note along with annual interest of 8% was due in a year. The estimated life of the equipment is 10 years with a salvage value of $6,000 3. Daily wages are $1,300 and are paid every Friday. The last day in January was a Tuesday. 8. The required adjusting entries on January 31 decreased net income by a total of Submit Answer Tries 0/3 9. The required adjusting entries on January 31 decreased total assets by a total of Submit Answer Tries 0/3Explanation / Answer
Answer:
8) The required adjustment entries on January 31 decreased net income by total of $40,400.
9) The required adjustment entries on January 31 decreased total assets by total of $40,400.
Calculation of Decrease in Net Income and Total Assets on January 31st : Particular Net Income Decrease Total Assests Increase Total Assests Decrease Net Decrease in Total Assets $ $ $ $ Store rental lease paid for the two month $48,000/12*2 4,000.00 8,000.00 8,000.00 Prepaid rent for 1 month $48,000/12*1 4,000.00 -4,000.00 Purchase of Equipment 60,000.00 -60,000.00 Downpayment for equipment purchase 6,000.00 6,000.00 Creditor for equipment purchase 60,000-6,000 54,000.00 54,000.00 Daily wages paid during the January 4 Friday in January 36,400.00 36,400.00 36,400.00 ($1300 Per Day for 7 days=$9,100 per Friday) Total 40,400.00 64,000.00 1,04,400.00 40,400.00Related Questions
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