KQuestion 4 (of 10) Save & Exit Subr value: 10.00 points Jay, Inc., a party rent
ID: 2337183 • Letter: K
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KQuestion 4 (of 10) Save & Exit Subr value: 10.00 points Jay, Inc., a party rental business, completed its first year of operations on December 31. Because this is the end of the annual accounting period, the company bookkepe prepared the following tentative income statement: Income Statement Rental revenue Expenses: 106,000 Salaries and wages expense Maintenance expense Rent expense Utilities expense Gas and oil expense Miscellaneous expenses (items not listed elsewhere) Total expenses 25,800 10,700 8,300 3,100 3,200 1,300 52,400 53,600 Income You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In your a data as follows: udit, you developed additional a. Wages for the last three days of December amounting to $750 were not recorded or paid. b. Jay estimated telephone usage at $440 for December, but nothing has been recorded or paid. c. Depreciation on rental autos, amounting to $22,200 for the current year, was not recorded. d. Interest on a $18,000, one-year, 14 percent note payable dated October 1 of the current year was s not recorded. The 14 percent interest is payable on the matuity date of the note. e. Maintenance expense excludes $2,500, representing the cost of maintenance supplies used during the current year. g. The income tax expense is $5,400. Payment of income tax will be made next year Required 1. What adjusting entry for each item (a) through (g) should Jay record at December 31? (If no entry is required for a transaction/event, select "No journal entry The Unearned Rental Revenue account includes $5,500 of revenue to be earned in January of next year required" in the first account field. Round final answer to whole dollars.) 21Explanation / Answer
JAY, INC
Income Statement
For the year ended December 31
Operating Revenues
Rental Revenue
$ 106,000.00
Operating Expenses
Salaries and wages expenses
$ 26,550.00
Maintenance Expenses
$ 13,200.00
Rent Expense
$ 8,300.00
Utilities Expense
$ 3,540.00
gas and oil expense
$ 3,200.00
Miscellaneous expense
$ 1,300.00
Depreciation Expense
$ 22,200.00
Total Operating Expenses
$ 78,290.00
Operating Income
$ 27,710.00
Other Items
Interest Expense
$ 630.00
Pretax Income
$ 27,080.00
income tax Expense
$ 5,400.00
Net Income
$ 21,680.00
Balances before Adjustments
Adjustments
Balances after Adjustments
Accounts
Debit
Credit
Debit
Credit
Debit
Credit
Rental revenue
$ 106,000.00
$ 106,000.00
salaries and wages expenses
$ 25,800.00
$ 750.00
$ 26,550.00
Maintenance Expenses
$ 10,700.00
$ 2,500.00
$ 13,200.00
Rent Expense
$ 8,300.00
$ 8,300.00
Utilities Expense
$ 3,100.00
$ 440.00
$ 3,540.00
gas and oil expense
$ 3,200.00
$ 3,200.00
Miscellaneous expense
$ 1,300.00
$ 1,300.00
Depreciation Expense
$ 22,200.00
$ 22,200.00
Interest Expense
$ 630.00
$ 630.00
Income Tax Expense
$ 5,400.00
$ 5,400.00
JAY, INC
Income Statement
For the year ended December 31
Operating Revenues
Rental Revenue
$ 106,000.00
Operating Expenses
Salaries and wages expenses
$ 26,550.00
Maintenance Expenses
$ 13,200.00
Rent Expense
$ 8,300.00
Utilities Expense
$ 3,540.00
gas and oil expense
$ 3,200.00
Miscellaneous expense
$ 1,300.00
Depreciation Expense
$ 22,200.00
Total Operating Expenses
$ 78,290.00
Operating Income
$ 27,710.00
Other Items
Interest Expense
$ 630.00
Pretax Income
$ 27,080.00
income tax Expense
$ 5,400.00
Net Income
$ 21,680.00
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