..SECOND CHANCE EXAM 3 Questions & O Trerá Notes . Evaluate-Feedback-Print Quest

Question

..SECOND CHANCE EXAM 3 Questions & O Trerá Notes . Evaluate-Feedback-Print Questions 8 and 9 refer to the following information 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 $38,400, and rent for the first 2 months was paid in advance. 2. On January 1, equipment was purchased for $55,000 with a downpayment of $11,000 and a note for the remainder. The note along with annual interest of 7% was due ia year. The estimated life of the equipment is 10 years with a salvage value of $4,000. 3. Daily wages are $1,600 and are paid every Friday. The last day in January was a Monday. 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 0/3

Explanation / Answer

8. Decrease in net income= 53481.67

9. decrease in total assets =4000:

wages are paid every friday, since monday is the last date for january wages for sat, sun and mon not paid hence out of 31 days, 3 days wages unpaid hence 28 days wages are paid in cash, which is = 1600*28= 44800

Adjusting entry Amount workings Rent expense 3200 38400*1/12 equipment depreciation 425 Interest expense 256.67 wage expense 49600 [1600*31] 53,481.67

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