Check my work mode: This shows what is correct or incorrect for the work you hav

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Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion LThe following intormation applies to the questions displayed belowl Golf Academy, Inc. provides private golf lessons. Its unadjusted trial balance at December 31, 2018, follows, along with information about selected accounts Au reportedDeeeaber 31 bank statement. Supplie Based on coust, only $210 of aupplies still exist. and s400 for January Lessons December 28. They have not yst been paid for vork on s 3,000 of this amount, $2,600 vas recelved for December lessons Salaries and Wages payable Inployees vere paid s1,10 for io days of work through Decenber 29 and ncone Tax Payable tstecest Payable Notes Payable (losg-term 0 The company has paid last year's income tax but not this o me company hss not paid the sies of stereat owed on its notes payable for the curreat period. 12,600 his one-year note vas taken out this year on Decenber 1 Connon Stock is anoust van contributed for conmon stock is prior 100 This is the balance reported at the end of last year 51,620 Host eustoners pay cash for lessons each tine they ate Service Revenoe Salaries and Wages Expense36,200 Supplles Expense ployees vorked through Decenber 30, but did not work on 2, 500 This ia the cost ot supplies used through November 30. The conpary has not paid the $105 of intereat oved on ita notes payable for the current perlod The company has an average tax rate of 20% tscone Tax Expense CP4-4 Part 4 4-a. Calculate the 4-b. By what dollar amount did the adjustments in requirement 3 cause net income to increase or decrease? adjusted net income that the company should report for the year ended December 31, 2018 MacBook Air 4 7 2

Explanation / Answer

a Income Statement For the year ended December 31,2018 Revenues: Service revenue 54220 Total revenues 54220 Expenses: Salaries and wages expense 36420 Supplies expense 2910 Interest expense 105 Income tax expense 2957 Total expenses 42392 Net income 11828 Income tax calculation: Service revenue 54220 Total expenses excluding income tax: Salaries and wages expense 36420 Supplies expense 2910 Interest expense 105 Total expenses excluding income tax 39435 Income before income tax 14785 Multiplied by average tax rate 20% Income tax expense 2957 b Change in income = 2600-410-220-105-2957=($1092) Net income decreases by $1092

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