The following information is available for Drake Company, which adjusts and closes its accounts every December 31:
The following information is available for Drake Company, which adjusts and closes its accounts every December 31:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following information is available for Drake Company, which adjusts and closes its accounts every December 31:
1. | Salaries accrued but unpaid total $2,840 on December 31. |
2. | The $247 December utility bill arrived on December 31 and has not been paid or recorded. |
3. | Buildings with a cost of $78,000, 25-year life, and $9,000 residual value are to be |
4. | A count of supplies indicates that the Store Supplies account should be reduced by $128 and the Office Supplies account reduced by $397 for supplies used during the year. |
5. | The company holds a $6,000, 12% (annual rate), 6-month note receivable dated September 30, from a customer. The interest is to be collected on the maturity date. |
6. | |
7. | An analysis of the company insurance policies indicates that the Prepaid Insurance account is to be reduced for $528 of expired insurance. |
8. | A review of travel expense reports indicates that $310 has been paid for airfare for a salesperson (and recorded as Travel Expenses), but has not yet been used. |
9. | The income tax rate is 30% on current income and will be paid in the first quarter of next year. The pretax income of the company before adjustments is $18,270. |
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