Question 5 Before month-end adjustments are made, the September 30 trial balance

Question

Question 5 Before month-end adjustments are made, the September 30 trial balance of Horton Enterprise contains revenue of $9,200 and expenses of $6,500. Adjustments are necessary for the following items: • Depreciation for September is $300. • Revenue earned but not yet billed is $2,100. • Accrued interest expense is $800. • Revenue collected in advance that is now earned is $3,400. • Portion of prepaid insurance expired during September is $300. Calculate the correct net income for Horton’s for September. Net income $

Explanation / Answer

Answer:

Net income for Horton’s :

Revenue - $9,200

Expenses - $6,500

Gross profit - $ 2,700

adjustments :

deduct:

Depreciation- $300

interest expense- $800

revenue in advance - $3400

insurance expe - $300

Add back items

Revenue earned but not billed - $2100

Therefore the net income for september month is = gross profit - deduction + add backs

= 2700-300-800-3400-300+2100 = 0

Therefore answer is 0

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.