please show the step to solutions as possible as you can 36. Regions Inc. pays i
ID: 2540823 • Letter: P
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please show the step to solutions as possible as you can
36. Regions Inc. pays its rent of $48,000 annually on January 1 and makes monthly adjusting entries. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following are true? a. Failure to make the adjustment does not affect the February financial statements. b. Expenses will be overstated by $4,000 and net income and stockholders' equity will be understated by $4,000 Assets will be overstated by $8,000 and net income and stockholders' equity will be understated by $8,000 Assets will be overstated by $4,000 and net income and stockholders' equity will be overstated by $4,000. c. d. a. b. c. d. are prepared before the financial statements. reduce the number of permanent accounts. cause the revenue and expense accounts to have zero balances. summarize the activity in every account 38. The following information is from the Income Statement of the Dirt Poor Laundry Service Service Revenue 5,500 Expenses Salaries and Wages expense Advertising expense Rent expense Supplies expense 1,950 500 300 200 100 Total expenses 3.050 Net Income The entry to close the expense accounts includes a: a. credit to Income Summary for $3,050. b. debit to Income Summary for $3,050 c. debit to Salaries and Wages Expense for $1,950. d. credit to Retained Earnings for $3,050 39. Gross profit equals the difference between a. net income and operating expenses. b. sales revenue and cost of goods sold. c. sales revenue and operating expenses. d. sales revenue and cost of goods sold plus operating expenses.Explanation / Answer
36) 48000/12 = $4000 expense omitted to be expensed for the month of february answer - option d Assets will be overstated by $4,000 and stockholder's equity will be overstated by $4,000 37) answer - option c cause the revenue and expense accounts to have zero balance 38) entry to close expense account DR CR income summary 3,050 salaries and wage expense 1,950 advertising expense 500 rent expense 300 supplies expense 200 insurance expense 100 option b) - answer debit to income summary for $3,050 39) answer option b sales revenue - cost of goods sold 40) inventory received 40,000 Returned -800 Freight in 200 purchase discount(40000-800)* 2% -784 increase in inventory 38,616 option d( $38,616 41) option c)-answer accounts receivable and credit to sales revenue 42) option D) allowance 43) option d) Accounts receivable will be credited 44) option c Credit,debit,debit 45) Net sales sales 160,000 less sale discount -6,000 sales return & allowance -4,000 Net sales 150,000 option b) $150,000
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