company has a fiscal year-end of December 31: (1) on October 1, $21,000 was paid for a one-year fire insurance policy; (2) on June the company loaned its chief financial officer $19,000; principal and interest at 5% on the note are due in one year; and (3) uipment costing $69,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,800 per year. he adjusting entries were not recorded, would net income be higher or lower and by how much? ote: Decreases to account classifications should be entered as a negative. Adjusting Entry (1) (2) (3) Total Net income higher
company has a fiscal year-end of December 31: (1) on October 1, $21,000 was paid for a one-year fire insurance policy; (2) on June the company loaned its chief financial officer $19,000; principal and interest at 5% on the note are due in one year; and (3) uipment costing $69,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,800 per year. he adjusting entries were not recorded, would net income be higher or lower and by how much? ote: Decreases to account classifications should be entered as a negative. Adjusting Entry (1) (2) (3) Total Net income higher
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 3RE: Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that...
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![Brief Exercise 2-12 (Algo) Adjusting entries; income determination [LO2-5, 2-6]
A company has a fiscal year-end of December 31: (1) on October 1, $21,000 was paid for a one-year fire insurance policy; (2) on June
30 the company loaned its chief financial officer $19,000; principal and interest at 5% on the note are due in one year; and (3)
equipment costing $69,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,800 per year.
If the adjusting entries were not recorded, would net income be higher or lower and by how much?
Note: Decreases to account classifications should be entered as a negative.
Adjusting Entry
(1)
(2)
(3)
Total
Net income
higher
lower](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5db43ac1-a81b-4bbb-9e96-1a42493a14a3%2F21b7e632-ae0d-4873-8c45-719a42fc730f%2Flhovzb_processed.png&w=3840&q=75)
Transcribed Image Text:Brief Exercise 2-12 (Algo) Adjusting entries; income determination [LO2-5, 2-6]
A company has a fiscal year-end of December 31: (1) on October 1, $21,000 was paid for a one-year fire insurance policy; (2) on June
30 the company loaned its chief financial officer $19,000; principal and interest at 5% on the note are due in one year; and (3)
equipment costing $69,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,800 per year.
If the adjusting entries were not recorded, would net income be higher or lower and by how much?
Note: Decreases to account classifications should be entered as a negative.
Adjusting Entry
(1)
(2)
(3)
Total
Net income
higher
lower
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