Before making month-end adjustments, net income of Cardinal Company was $116,000 for March. Adjusting entries are necessary for the following items: -Depreciation for the month of March: $2,300. -Rental income accrued during March, tenant to pay in April: $800. -Supplies used in March: $100. -Fees earned in March that had been collected in advance: $2,600. After recording these adjustments, net income for March is:
Effect of Adjusting Entries:
Adjusting entries are recorded to ensure that the net income reported in the income statement represents the result of all the revenue earned and expenses incurred, not only those received and paid in cash.
Answer and Explanation: 1
The correct option is c).
The adjusting entries for depreciation and supplies used will decrease the unadjusted net income because they are...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 22 / Lesson 16
Learn the definition of adjusting entries in accounting, and find examples. Explore the various types of adjusting journal entries, and examine how to do them.