X Company prepares monthly financial statements. The following transactions occu

Question

X Company prepares monthly financial statements. The following transactions occurred during January: 1. On January 1, a one-year store rental lease was signed for a total of $38,400, and rent for the first 2 months was paid in advance. 2, on January 1, equipment was purchased for $60,000 with a downpayment of $12,000 and a note for the remainder. The note along with annual interest of 8% was due in a year. The estimat in life of the equipment is 10 years with a salvage value of $4,000 3. Daily wages are $1,300 and are paid every Friday. The last day in January was a Monday. are $1,300 and are pof $12,000 and a note 8. The required adjusting entries on January 31 decreased net income by a total of Submit Answer Tries 0/3 9. The required adjusting entries on January 31 decreased total assets by a total of Submit Answer Tries 0/3

Explanation / Answer

8 Decrease in net income: Rent 3200.00 =38400/12 Depreciation 466.67 =(60000-4000)/10/12 Interest expense 320.00 =48000*8%/12 Wages 1300.00 =1500*2 Decrease in net income 5286.67 or 5287 9 Decrease in total assets = 3200+466.67= 3666.67 or 3667

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