X Company prepares monthly financial statements. The following transactions occu
ID: 2598715 • Letter: X
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 $30,000, and rent for the first 2 months was paid in advance. 2. On January 1, equipment was purchased for $55,000 with a downpayment of $5,500 and a note for the remainder. The note along with annual interest of 7% was due in a year. The estimated ife of the equipment is 10 years with a salvage value of $6,000. 3. Daily wages are $1,500 and are paid every Friday. The last day in January was a Monday. 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 0/3Explanation / Answer
On January 1, a one-year store rental lease was signed for a total of $30,000, and rent for the first 2 months was paid in advance. Rent expense (30000/12) $ 2,500 Prepaid rent $ 2,500 On January 1, equipment was purchased for $55,000 with a downpayment of $5,500 and a note for the remainder. The note along with annual interest of 7% was due in a year. The estimated life of the equipment is 10 years with a salvage value of $6,000. Depreciation expense(55000-6000)/120 months $ 408 Accumulated depreciation $ 408 Intrest expense (49500 x 7%/12) $ 289 Interest payable $ 289 Daily wages are $1,500 and are paid every Friday. The last day in January was a Monday. Wage expense (1500 x 1 days) $ 1,500 Wages payable $ 1,500 Total impact on net income Rent expense $ 2,500 Depreciation expense 408 Interest expense 289 Wage expense 1,500 Net income decreased by $ 4,697 Total impact on total assets Prepaid rent $ 2,500 Accumulated depreciation 408 Total assets decreased by $ 2,908
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.