This is all that is given below: X Company prepares monthly financial statements

Question

This is all that is given below:

X Company prepares monthly financial statements. The following transactions occurred during January: On January 1, a one-year store rental lease was signed for a total of $45,600, and rent for the first 3 months was paid in advance. On January 1, equipment was purchased for $60,000 with a downpayment of $6,000 and a note for the remainder. The note along with annual interest of 8% was due in a year. The estimated life of the equipment is 10 years with a salvage value of $4,000. Daily wages are $1,000 and are paid every Friday. The last day in January was a Tuesday.

8. The required adjusting entries on January 31 decreased net income by a total of:

Explanation / Answer

Rent expense 3800 =45600/12 Depreciation expense 467 =(60000-4000)/10/12 Interest expense 360 =(60000-6000)*8%/12 Wages expense 4000 =1000*4 Decrease in net income 8627

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