Assume you are the accountant for Washington Enterprises. Paulette Washington, the ownerof the company, is in a hurry to receive the financial statements for the year ended December31, 20X1, and asks you how soon they will be ready. You tell her you have just completed thetrial balance and are getting ready to prepare the adjusting entries. Ms. Washington tells younot to waste time preparing adjusting entries but to complete the worksheet without themand prepare the financial statements based on the data in the trial balance. According to her,the adjusting entries will not make that much difference. The trial balance shows the followingaccount balances: Prepaid rent $ 85,900 Supplies 38,000 Building 497, 500 Accumulateddepreciation-Building 29,834 If the income statement were prepared using trial balanceamounts, the net income would be $192, 420. A review of the company's records reveals thefollowing information: Rent of $85, 900 was paid on July 1, 20X1, for 12 months. Purchases ofsupplies during the year totaled $38,000. An inventory of supplies taken at year-end showedsupplies on hand of $5,640. The building was purchased three years ago and has anestimated life of 30 years and a salvage value of $50, 000. No adjustments have been made toany of the accounts during the year. Indicate the change to net income that results from theadjusting entries. Note: Round your final answers to whole numbers.

The change in net income due to the adjusting entries is that either might be either expenses more…

Answered: any of the accounts during the year.…

any of the accounts during the year. Indicate the change to net income that results from the adjusting entries. Note: Round your final answers to whole numbers.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Assume you are the accountant for Washington Enterprises. Paulette Washington, the owner
of the company, is in a hurry to receive the financial statements for the year ended December
31, 20X1, and asks you how soon they will be ready. You tell her you have just completed the
trial balance and are getting ready to prepare the adjusting entries. Ms. Washington tells you
not to waste time preparing adjusting entries but to complete the worksheet without them
and prepare the financial statements based on the data in the trial balance. According to her,
the adjusting entries will not make that much difference. The trial balance shows the following
account balances: Prepaid rent $ 85,900 Supplies 38,000 Building 497, 500 Accumulated
depreciation-Building 29,834 If the income statement were prepared using trial balance
amounts, the net income would be $192, 420. A review of the company's records reveals the
following information: Rent of $85, 900 was paid on July 1, 20X1, for 12 months. Purchases of
supplies during the year totaled $38,000. An inventory of supplies taken at year-end showed
supplies on hand of $5,640. The building was purchased three years ago and has an
estimated life of 30 years and a salvage value of $50, 000. No adjustments have been made to
any of the accounts during the year. Indicate the change to net income that results from the
adjusting entries. Note: Round your final answers to whole numbers.

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