E4-5 During the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2024, you come across several items needing further consideration Currently, net income is $100.000 1. An insurance policy covering 12 months was purchased on October 1, 2024, for $24,000. The entire amount was recorded in Prepaid Insurance, and no adjustment was made for this item during 2024. 2. During 2024, the company received a $4.000 cash advance from a customer for services to be performed in 2025. The $4,000 was incorrectly recorded in Service Revenue 3. Purchases of supplies during the year were incorrectly recorded to Supplies Expense. You discover that supplies conting $2,750 were on hand on December 31, 2024. 4. Trojan borrowed $70,000 from a local bank on September 1, 2024. Principal and interest at 9% will be paid on August 31, 2025. No accrual was made for interest in 2024 Required: Using the information in 1 through 4 above, determine the proper amount of net income as of December 31, 2024.

E4-5 During the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2024, you come across several items needing further consideration Currently, net income is $100.000 1. An insurance policy covering 12 months was purchased on October 1, 2024, for $24,000. The entire amount was recorded in Prepaid Insurance, and no adjustment was made for this item during 2024. 2. During 2024, the company received a $4.000 cash advance from a customer for services to be performed in 2025. The $4,000 was incorrectly recorded in Service Revenue 3. Purchases of supplies during the year were incorrectly recorded to Supplies Expense. You discover that supplies conting $2,750 were on hand on December 31, 2024. 4. Trojan borrowed $70,000 from a local bank on September 1, 2024. Principal and interest at 9% will be paid on August 31, 2025. No accrual was made for interest in 2024 Required: Using the information in 1 through 4 above, determine the proper amount of net income as of December 31, 2024.

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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