A company had calculated net income to be $77,600 based on the unadjusted trial

Question

A company had calculated net income to be $77,600 based on the unadjusted trial balance. The following adjusting entries were then made for: Salaries and wages owed but not yet paid of $795 Interest earned but not received from investments of $755 Prepaid insurance premiums amounting to $555 have expired Unearned revenue in the amount of $755 has now been earned Required: Determine the amount of net income (loss) that will be reported after the adjustments are recorded. O $74740 O $79,665 O $77,760 O $77,360

Explanation / Answer

Answer

Unadjusted Net Income

$ 77,600.00

Less:

Salaries & wages not yet paid (outstanding)

$        795.00

Insurance expense (expired)

$        555.00

Add:

Interest earned but not received (accrued)

$        755.00

Unearned revenue, now earned

$        755.00

Adjusted Net Income

$ 77,760.00

Unadjusted Net Income

$ 77,600.00

Less:

Salaries & wages not yet paid (outstanding)

$        795.00

Insurance expense (expired)

$        555.00

Add:

Interest earned but not received (accrued)

$        755.00

Unearned revenue, now earned

$        755.00

Adjusted Net Income

$ 77,760.00

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