Questions 8 and 9 refer to the following information: X Company prepares monthly

Question

Questions 8 and 9 refer to the following information: 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 $36,000, and rent for the first 2 months was paid in advance. 2. On January 1 equipment was purchased or $55,000 with a downpayment of $11,000 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 3. Daily wages are $1,300 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 Subait Anewor Tries o . The required adjusting entries on January 31 decreased total assets by a total of sonit Answer Tries 0/3

Explanation / Answer

Answer:

8) The required adjustment entries on January 31 decreased net income by total of $39,400.

9) The required adjustment entries on January 31 decreased total assets by total of $39,400.

Calculation of Decrease in Net Income and Total Assets on January 31st : Particular Net Income Decrease Total Assests Increase Total Assests Decrease Net Decrease in Total Assets $ $ $ $ Store rental lease paid for the two month $36,000/12*2 3,000.00 6,000.00 6,000.00 Prepaid rent for 1 month $36,000/12*1 3,000.00 -3,000.00 Purchase of Equipment 55,000.00 -55,000.00 Downpayment for equipment purchase 11,000.00 11,000.00 Creditor for equipment purchase 55,000-11,000               44,000.00 44,000.00 Daily wages paid during the January 4 Friday in January        36,400.00               36,400.00 36,400.00 ($1300 Per Day for 7 days=$9,100 per Friday) Total        39,400.00        58,000.00 97,400.00 39,400.00

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.