2020 includes a debit to expense for the whole amount 50,000 Advance rental payment for 3 months paid to lessor on November 30, 2021; amount charged to rent expense; no adjusting entry made 30,000 Sales recorded on January 2, 2022, pertaining to a merchandise shipped to a customer last December 28, 2021; FOB Shipping point 120,000 Purchases recorded last December 30, 2021; merchandise was shipped last December 29, 2021, received January 3, 2022; FOB D
You were able to gather the following from your first-time audit client, WXY Corporation, as of and for the period ended December 31, 2021:
|
Supplies bought last October 20, 2020; 10% used during 2020; 20% remaining as of December 31, 2021; entry made in 2020 includes a debit to expense for the whole amount |
50,000 |
|
Advance rental payment for 3 months paid to lessor on November 30, 2021; amount charged to rent expense; no |
30,000 |
|
Sales recorded on January 2, 2022, pertaining to a merchandise shipped to a customer last December 28, 2021; FOB Shipping point |
120,000 |
|
Purchases recorded last December 30, 2021; merchandise was shipped last December 29, 2021, received January 3, 2022; FOB Destination |
45,000 |
|
Interest on an amount lent to a borrower, note was received last December 1, 2021, term is 6 months face value is 100,000; interest income recorded interest rate per annum is |
9% |
|
A minor repair on an equipment on January 2, 2021, was capitalized; the useful life the equipment on January 2, 2021, was 6 years |
300,000 |
Requirements:
- Determine net increase/decrease in net income for 2021.
- Prepare a compound adjusting
journal entry to reflect the correct net income for 2021, assuming that the books of 2021 are still open.
Step by step
Solved in 2 steps with 3 images
