Calculate the Year-End Corrected Balances
Not what you're looking for?
On December 31, 2008 Tie One On reported net income for the year $265,000 and the following account balances
Cash $175,000
Accounts Receivable 21,000
Prepaid rent 6,000
Equipment & Furnishings 230,000
Accumulated Depreciation- equipment & Furnishings (43,000)
Accounts Payable 39,000
Wages payable 13,000
Owners equity(including net income of $265,000) 337,000
After this information was prepared, the book-keeper discovered that they failed to prepare two adjusting entries. These were not reflected in the balances shown. Here is the information on these two entries
1. The prepaid rent account was paid on April 1, 2008, for one year for $6,000. The account has not been adjusted since.
2. A bill received in January 2009 for utilities incurred in December 2008 for $1,400 was mistakenly not entered into the system.
Please calculate the year-end corrected balances for the following three accounts: assets, liabilities, and equity. You can enter your answer in the following format
For example:
Assets = $X (show your work in parentheses, numbers only, no titles necessary.
Purchase this Solution
Solution Summary
This solution provides the corrected year-end balances for assets, liabilities, and equity. Accumulated depreciation for equipment and furnishings is examined.
Solution Preview
1. The prepaid rent account was paid in April for $6,000 and was never adjusted. Therefore, rent expense = 6,000 / 12 = 500 per month. April 1 to 12/31 = 9 months. 500 x 9 = 4500. ...
Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.