accounting period, the company Income Statement Rent revenue Expenses: Salaries and wages expense Maintenance expense Rent expense Utilities expense Gas and oil expense Miscellaneous expenses (items not listed elsewhere) $109,000 26,500 12,000 8,800 4,300 3,000 1,000 Total expenses 55,600 $53,400 Income You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In your audit, you developed additional data as follows: a. Salaries and wages for the last three days of December amounting to $730 were not recorded or paid. b. Jay estimated telephone usage at $440 for December, but nothing has been recorded or paid. c. Depreciation on rental autos, amounting to $24,000 for the current year, was not recorded. d. Interest on a $15,000, one-year, 8 percent note payable dated October 1 of the current year was not recorded.,The 8 percent interest is payable on the maturity date of the note. e. Maintenance expense excludes $1,100, representing the cost of maintenance supplies used during the current year. f. The Unearned Rent Revenue account includes $4,100 of revenue to be earned in January of next year. g. The income tax expense is $5,800. Payment of income tax will be made next year. Required: 1. What adjusting entry for each item (a) through (g) should Jay record at December 31? 2. Prepare a corrected income statement for the current year including earnings per share. Assume that 7,000 shares of stock are outstanding all year. 3. Compute the total asset turnover ratio based on the corrected information. Assume the beginning-of-the-year balance for Jay's total assets was $58,020 and its ending balance for total assets was $65,180.
accounting period, the company Income Statement Rent revenue Expenses: Salaries and wages expense Maintenance expense Rent expense Utilities expense Gas and oil expense Miscellaneous expenses (items not listed elsewhere) $109,000 26,500 12,000 8,800 4,300 3,000 1,000 Total expenses 55,600 $53,400 Income You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In your audit, you developed additional data as follows: a. Salaries and wages for the last three days of December amounting to $730 were not recorded or paid. b. Jay estimated telephone usage at $440 for December, but nothing has been recorded or paid. c. Depreciation on rental autos, amounting to $24,000 for the current year, was not recorded. d. Interest on a $15,000, one-year, 8 percent note payable dated October 1 of the current year was not recorded.,The 8 percent interest is payable on the maturity date of the note. e. Maintenance expense excludes $1,100, representing the cost of maintenance supplies used during the current year. f. The Unearned Rent Revenue account includes $4,100 of revenue to be earned in January of next year. g. The income tax expense is $5,800. Payment of income tax will be made next year. Required: 1. What adjusting entry for each item (a) through (g) should Jay record at December 31? 2. Prepare a corrected income statement for the current year including earnings per share. Assume that 7,000 shares of stock are outstanding all year. 3. Compute the total asset turnover ratio based on the corrected information. Assume the beginning-of-the-year balance for Jay's total assets was $58,020 and its ending balance for total assets was $65,180.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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accounting period, the company bookkeeper prepared the following tentative income statement:
Rent revenue
Expenses:
Salaries and wages expense
Maintenance expense
Rent expense
Utilities expense
Gas and oil expense
Income Statement
Miscellaneous expenses (items not listed elsewhere)
Total expenses
Income
$109,000
26,500
12,000
8,800
4,300
3,000
1,000
55,600
$53,400
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You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In
your audit, you developed additional data as follows:
a. Salaries and wages for the last three days of December amounting to $730 were not recorded or paid.
b. Jay estimated telephone usage at $440 for December, but nothing has been recorded or paid.
c. Depreciation on rental autos, amounting to $24,000 for the current year, was not recorded.
d. Interest on a $15,000, one-year, 8 percent note payable dated October 1 of the current year was not recorded. The 8 percent
interest is payable on the maturity date of the note.
e. Maintenance expense excludes $1,100, representing the cost of maintenance supplies used during the current year.
f. The Unearned Rent Revenue account includes $4,100 of revenue to be earned in January of next year.
g. The income tax expense is $5,800. Payment of income tax will be made next year.
Required:
1. What adjusting entry for each item (a) through (g) should Jay record at December 31?
2. Prepare a corrected income statement for the current year including earnings per share. Assume that 7,000 shares of stock are
outstanding all year.
3. Compute the total asset turnover ratio based on the corrected information. Assume the beginning-of-the-year balance for Jay's
total assets was $58,020 and its ending balance for total assets was $65,180.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
What adjusting entry for each item (a) through (g) should Jay record at December 31?
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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1
2
3
4
5
6
7
Salaries and wages for the last three days of December amounting to $730
were not recorded or paid.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
a.
View general journal
Record entry
Clear entry
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