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Concept explainers
Exercise 3-55
Effect of Adjustments on the Financial Statements
VanBrush Enterprises, a painting contractor, prepared the following
a. Wages Expense ................ 2,550
Wages Payable 2,550
b.
Service Revenue .............. 8,110
c. Unearned Service Revenue ………………… 5,245
Service Revenue ………..... 5.245
d. Rent Expense ............. 3,820
Prepaid Rem .......... 3,820
Required:
1. Show the effect of these adjustments on assets, liabilities, equity, revenues, expenses, and net Income.
2. CONCEPTUAL CONNECTION If these adjustments were made with estimates that were considered conservative, how would this affect your interpretation of earnings quality?
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Chapter 3 Solutions
Cornerstones of Financial Accounting
- correct answer pleasearrow_forwardThe following data were selected from the records of Fluwars Company for the year ended December 31, current year: Balances at January 1, current year: Accounts receivable (various customers) $ 111,500 Allowance for doubtful accounts 11,200 The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return. The following transactions occurred during the current year: Sold merchandise for cash, $252,000. Sold merchandise to Abbey Corp; invoice amount, $36,000. Sold merchandise to Brown Company; invoice amount, $47,600. Abbey paid the invoice in (b) within the discount period. Sold merchandise to Cavendish Inc.; invoice amount, $50,000. Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods. Brown paid its account in full within the discount period. Sold merchandise to Decca Corporation; invoice amount, $42,400. Cavendish paid its account in full after the…arrow_forwardcan you please solve thisarrow_forward
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