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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.

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
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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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.
Transcribed Image Text: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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