Before making month-end adjustments, net income of Cardinal Company was $116,000 for March....
Question:
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:
a) $112,400.
b) $113,620.
c) $117,000.
d) $110,800.
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
Become a Study.com member to unlock this answer! Create your account
View this answerThe 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.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Adjusting Entries: Definition, Types & Examples
from
Chapter 22 / Lesson 16
43K
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.
Related to this Question
- On April 1, Babko Company paid $1,500 for 6-months rent. What is the adjusting entry for the fiscal year ending June 30? A. debit rent expense and credit prepaid rent for $1,000 B. debit prepaid rent and credit rent expense for $750 C. debit rent expense
- On June 1, 2019, Herbal Company received $54,450 for the rent of land for 12 months. Journalize the adjusting entry required for unearned rent on December 31, 2019.
- Before month-end adjustments are made, the February 28 trial balance of Al's Enterprise contains revenue of RM9,000 and expenses of RM4,800. Adjustments are necessary for the following items: -Depreciation for February is RM1,300. -Service revenue earne
- Before month-end adjustments are made, the February 28 trial balance of Bose's Enterprise contains revenue of $11,000 and expenses of $7,600. Adjustments are necessary for the following items: -Depreciation for February is $1,200. -Revenue earned but no
- On December 1, 20A, Pest Company collected $1,200 in advance for three months of rent on some office space. It was credited in full to unearned rent revenue. Assuming the accounting year ends December 31, give the adjusting entry required on December 31,2
- On February 1, 2016, ABC Company had $5,000 worth of office supplies on hand. At the end of the month, there was only $3,200 remaining. What is the Adjusting entry required at month-end? a. Debit Accumulated Depreciation $5,000; Credit Depreciation expen
- Pixies Inc. pays its rent of $54,000 annually on January 1. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true? a. Failure to make the adjustment does not affect the February financial statements.
- Redo the company's income statement at the 7,000-unit level of activity using the contribution format. Income Statements for the Three Months ending June 30 April May June Sales in units 6,500 7,400
- Before month end adjustments are made, the February 28 trial balance of Cole's Enterprise contains revenue of $11,000 and expenses of $8,900. Adjustments are necessary for the following items: a) Dep
- A company owes workers $3,000 in wages for hours worked in March. In April, the company writes a check for wages. Using the accrual basis what entry does the company make in March?
- Rasner Co. returned defective goods costing $3000 to Markum Company on April 19 for credit. The goods were purchased on March 10 on credit terms 3/10, n/30. The entry by RasnerCo. on April 19, in receiving full credit is: a. Accounts Payable 3000 Merchand
- For each of the following transactions for the Sky Blue Corporation, prepare the adjusting journal entries required on October 31. a. Collected $3,300 rent for the period October 1 to December 31, which was credited to Unearned Revenue on October 1. b.
- On December 1, 2016, the company received $3,000 in cash from another company that is renting office space in its building. The payment, representing rent for December and January, was credited to deferred rent revenue. Prepare the necessary adjusting ent
- On April 30, Hilte Corporation performed a month-end inventory and counted office supplies valued at $1,425. On April 1, the balance in the Supplies account was $750. Assuming that $2,900 of purchases
- Before any month-end adjustments are made, the net income of Bennett Company is $76,900. The following adjustments are necessary: office supplies used, $3,250; services performed for clients but not yet recorded or collected, $3,730; interest accrued on n
- Unearned Revenue was $600 at the end of February and $750 at the end of March. Service Revenue was $4,200 for the month of March. How much cash was received from revenue during March?
- Waggoner Company has a cash balance of $39,000 on April 1. The company is required to maintain a cash balance of $24,000. During April expected cash receipts are $186,000. Expected cash disbursements during the month total $215,200. During April the comp
- Whitefish Company budgets its cash two months at a time. Budgeted cash disbursements for March and April, respectively, are: for inventory purchases, $90,000 and $82,000; for selling and administrative expenses (includes $5,000 depreciation each month), $
- The management of Paye Corporation expects sales in April to be $130,000. The company's contribution margin ratio is 65% and its fixed monthly expenses are $54,000. Required: Estimate the company's
- A company uses January 31 financial reporting year end and records adjustments once a year. Prepare adjusting entries needed for the following The company received $2,400 on January 1 for a 10-month
- For the month ended February 28, 2014, a company capitalized a $3,000 expenditure that should have been expensed. Depreciation expense for the full month, using the straight-line method, was recorded for $120 in February with respect to this item. Reporte
- For the month ended February 28, 2019, a company capitalized a $3,000 expenditure that should have been expensed. Depreciation expense for the full month, using the straight-line method, was recorded for $120 in February with respect to this item. Reporte
- Theta prepares its financial statements for the year to 30 April each year. The company pays rent for its premises quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. The annual rent was $84,000 per year until 30 June 20X5. It was
- On November 1, 2016, the company paid its landlord $6,900 representing the rent for the months of November through January. Prepaid Rent was debited. Prepare the necessary adjusting entry to be made on December 31, 2016.
- Peabody Enterprises prepared the following sales budget: Month Budgeted Sales March $6150 April $13236 May $12208 June $14047. The expected gross profit rate is 40%, and the inventory at the end of February was $10,000. At the end of the month, desired in
- For each of the following transactions for the Sky Blue Corporation, give the accounting equation effects of the adjustments required at the end of the month on October 31. a. Collected $2,400 rent for the period October 1 to December 31, which was credi
- On April 1, 2019, Orbit Services received $10,200 in advance of performing the services from a customer for three months of service -- April, May, and June. What would be the journal entry to adjust the accounts at the end of May? (Do not round any interm
- Miller Company has the following data: Month Budgeted Sales January $400,000 February 360,000 March 440,000 April 480,000 The gross profit rate is 40 percent, and the inventory at the end of Dec
- Peabody Enterprises prepared the following sales budget: | Month | Budgeted Sales | March | $6,010 | April | $13,120 | May | $12,075 | June | $14,018 The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired i
- A business compiling its financial statements for the year ended 31 July each year pays rent quarterly in advance on 1 January, 1 April, 1 July, and 1 October each year. The annual rental was increased from 60,000 pounds per year to 72,000 pounds per year
- Blossom Company received a check for $21,240 on July 1, which represents a 6-month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $21,240. Financial statements will be prepared on July 31. What
- Fosnight Enterprises prepared the following sales budget: Month Budgeted Sales March $6,000 April $13,000 May $12,000 June $14,000 The expected gross profit rate is 30% and the inventory at the end of February was $10,000. Desired inventory levels at the
- Bojana Tax Services' office supplies account balance on March 1 was $800. The company purchased $750 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $900 unused. What is the amount of the adjusting entr
- Gerdie Company has the following information: Month Budgeted Sales March $50,000 April 53,000 May 51,000 June 54,500 July 52,500 In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month's cost of sales. Prepare a pu
- At March 31 Streuling Enterprises, a merchandising firm, had an inventory of 38,000 units. Sales, in units, have been budgeted as follows for the next four months: April...................... 60,000 M
- Peabody Enterprises prepared the following sales budget: Month Budgeted Sales March: $6,130 April: $13,122 May: $12,177 June: $14,010 The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at t
- Parry company has accounts receivable of $105,100 at March 31, 2012. An analysis of the accounts shows these amounts: Balance, March 31 Month of Sale 2012 2011 March $72,700 $78,300 February 12,400 7,
- Marcellono Co's March 31 inventory of raw materials is $85,000. Raw materials purchases in April are $540,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: indi
- On September 1, 2018, Real Estate Professionals Company paid $5,000 in advance for an eight-month rental space covering the period of September 1, 2018, through April 30, 2019. The deferred expense was initially recorded as an asset. The company makes adj
- Suppose a company rents office space for one year, paying $30,000 ($2,500/month) in advance on September 1. Record the adjusting entry on December 31.
- A company expects to make purchases of $65,000 in January; $80,000 in February; $70,000 in March; and $90,000 in April. Purchases are paid 35% in the month of purchase and 65% in the month after purchase. How much is budgeted accounts payable at March 31
- ABC Company's budgeted sales for June, July, and August are 13,000, 17,000, and 14,700 units. The following cost behavior patterns are budgeted for ABC Company's operating expenses each month: Fixed costs: salaries, $2,500; rent, $5,500; depreciation, $2
- A company receives rent from a large number of properties. The total received in the year ended 30 April 20X6 was $481,200. The following were the amounts of rent in advance and in arrears at 30 April 20X5 and 20X6: Rent in arrears (all subsequently rec
- Sander Enterprises prepared the following sales budget: Month Budgeted Sales March $8,000 April $13,000 May $12,000 June $14,000 The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the en
- Sander Enterprises prepared the following sales budget: Month Budgeted Sales March $8,000 April $13,000 May $12,000 June $14,000 The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the e
- On 1 July the Winter Shoe Store paid $3,000 to Ace Realty for 6 months' rent beginning 1 July. Prepaid Rent was initially recorded as an asset for the full amount. If financial statements are prepared on 31 July, the adjusting entry to be made by the Wint
- Diamond Window Corporations sales, half of which are for cash, over the past three months were: March 140,000 April 240,000 May 169,000 Estimate the cash receipts in May if the company's collection period is 60 days.
- Diamond Window Corporations sales, half of which are for cash, over the past three months were: March 140,000 April 240,000 May 169,000 Estimate the cash receipts in May if the company's collection period is 45 days.
- On February 28, six months of insurance was purchased for $2,400 for March through September coverage. What is the required monthly adjusting entry for July?
- Ciolino Co.'s March 31 Inventory of raw materials is $130,000. Raw materials purchases in April are $450,000, and factory payroll cost in April is $237,000. Overhead costs incurred in April are: indir
- Ciolino Co.'s March 31 inventory of raw materials is $140,000. Raw materials purchases in April are $460,000, and factory payroll cost in April is $210,000. Overhead costs incurred in April are: indir
- If Mr. Mabrey received $2,500 from a tenant on December 1 for five months' rent of an office. This rent was for December, January, February, March, and April. If Mabrey debited Cash and credited Une
- Caplico Company has prepared the following sales budget: Month Budgeted Sales ; March $400,000 ; April 207,000 ; May 241,000 ; June 248,000 ; Cost of goods sold is budgeted at 40% of sales, and the in
- On February 1, 2016, the balance of the retained earnings account of Blue Power Corporation was $315,000. Revenues for February totaled $61,000, of which $57,500 was collected in cash. Expenses for February totaled $65,000, of which $54,000 was paid in ca
- After its first month of operation, the following amounts were taken from the accounting records of Benjamin Realty Inc. as of April 20Y9. Prepare a retained earnings statement for the month ending Ap
- Fosnight Enterprises prepared the following sales budget: Month Budgeted Sales March $9,000 April $15,000 May $13,000 June $12,000 The expected gross profit rate is 20% and the inventory at the end
- Prepare journal entries for the following transactions in the month of April on an accrual basis: - Purchase Product A 1,500 units at $3 per unit on credit. - Sold Product A 1,000 units at $7 per unit and received payment. - Pay quarterly rental charg
- Florida Company opened its doors on March 31 of the current year. Projected manufacturing costs for the first three months of business are $156,800, $195,200, and $217,600, respectively, for April, May, and June. Depreciation, insurance, and property taxe
- On December 1, 2013, an advance rent payment of $14, 700, representing a three-month prepayment for the months of December, January, and February was received in cash from the company's tenant. Requi
- Company forecasts $43,378 of sales in January, $38,000 in February, $30,756 in March, and $32,000 in April. Cost of goods sold is budgeted at 75% of sales. Clover should have inventory on hand at the end of each month equal to $5,000 plus 20% of the follo
- The CHS Company paid $84,000 cash to its landlord on November 1, 2014 for rent covering the six-month period from November 1, 2014 through April 30, 2015. The books are adjusted only at year-end. Whic
- Abc corp had the following budgeted data for april 2013, cash balance beginning 30,000, sales revenue April 150,000, sales revenue march 100,000, DM purchases april 80,000, DM purchases, March 60,000.
- The beginning asset account balances for April are the same as the __________. a. Accrued as April progresses b. Zero, since it is a new month c. Transactions from April d. Ending balances from March
- Supplies, unearned revenue, and the financial statements model Hart, Attorney at Law, experienced the following transactions in 2016, the first year of operations: 1. Accepted $36,000 on April 1, 20
- Brandon Company has prepared the following sales budget: Month Budgeted Sales March $200,000 April 180,000 May 220,000 June 260,000 Cost of goods sold is budgeted at 50% of sales and the inventory at
- On September 1, 2018, Real Estate Professionals Company paid $5,000 in advance for an eight-month rental space covering the period of September 1, 2018 through April 30, 2019. The deferred expense was initially recorded as an asset. The company makes adju
- Koshy Company is planning a cash budget for the next three months. Estimated sales revenue is: Month Revenue Month Revenue January $175,000 March $125,000 February 150,000 April 100,000 Month Sales Re
- Sander Enterprises prepared the following sales budget: March - $8,000 April - $13,000 May - $12,000 June - $14,000 The expected gross profit rate is 40%, and the inventory at the end of February was $10,000. Desired inventory levels at the end of the mon
- LeMinton Company expects the following credit sales for the first five months of the year: January, $25,000; February, $40,000; March, $30,000; April, $36,000, May $40,000. Experience has shown that payment for the credit sales is received as follows: 60%
- LeMinton Company expects the following credit sales for the first five months of the year: January, $44,000; February, $59,000; March, $49,000; April $55,000, May $59,000. Experience has shown that payment for credit sales is received as follows: 60% in
- A company has budgeted direct materials purchases of $200,000 in March and $320,000 in April. Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month. During April, the foll
- On Tuesday, March 31, the Zenox Company had accrued wages of $2,000. Friday, April 3, Zenox paid employee wages of $5,000 for the week. What is the April 3 entry to record the payment of the week's wages?
- The following information was used by the Long Corporation to prepare a cash budget for April: Cash balance beginning of April : $ 16,000 Expected cash receipts in April : 272,000 Sales salaries paid : 62,000 Material purchases (all
- Menge Company has accounts receivable of $108,900 on March 31. An analysis of the accounts shows the following information. Month of Sale Balance, March 31 March $70,800 February $20,300 January $9,400 Prior to January $8,400 $108,900 Credit terms are 2/1
- Crede Company budgeted selling expenses of $29,200 in January, $34,400 in February, and $39,800 in March. Actual selling expenses were $30,500 in January, $33,970 in February, and $47,600 in March. The company considers any difference that is less than 5%
- MNP Ltd. has prepared the following sales and cash disbursement estimates tor tire period February-June of the current year. Month Sales Cash Disbursement February $500 $400 March $600 $300 April. $40
- Tamarisk Company's record of transactions concerning part X for the month of April was as follows. Purchases Sales April 1 (balance on hand) 360 @ $6.70 April 5 560 4 660 @ 6.83 12 460 11 560 @
- An inventory loss from market decline of $900,000 occurred in April 2011. CD Company recorded this loss in April 2011 after its March 31, 2011, quarterly report was issued. None of this loss was recovered by the end of the year. How should this loss be re
- Small Musical Production is owned and operated by Richard Small and the company's financial year end is June 30th each year. Consider the unadjusted trial balance of the company on June 30, 2014, and the related month-end adjustment data. Adjustment da
- Small Musical Production is owned and operated by Richard Small and the company's financial year end is June 30th each year. Consider the unadjusted trial balance of the company on June 30, 2014, and the related month-end adjustment data. Adjustment d
- The projected sales, in units, for Galileo Inc. by month for the first four months were: January 12,800 February 12,000 March 16,000 April 19,200 Inventory of finished goods on December 31 was 6,400 units. The company desires to have an ending inven
- On April 10, 2014, fire damaged the office and warehouse of Corvet Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2014: Inventory (January 1, 2014), $80,000; Sales Revenue (Janua
- Menge Company has accounts receivable of $119,400 at March 31. An analysis of the accounts shows the following information. Month of Sale Balance, March 31 March $77,700 February 25,000 January 9,300
- During the month of August, deposits in the mount's of $1,100 were received fir services to be performed. By the end of the month, services in the amount of $760 had been performed. Prepare the necessary adjustments for service revenue at the end of the
- Headland Company's record of transactions for the month of April was as follows: Purchases Sales April 1 (balance on hand) 720@ $5.00 April 3 600@ $11.00 4 1,800@ 5.09 9 1,680@ 11.00 8 960@ 5.41 11
- On February 25, a CPA issued an auditor's report expressing an unqualified opinion on financial statements for the year ended January 31. On March 2, the CPA learned that on February 11, the entity incurred a material loss on an uncollectible trade receiv
- Sparks Corporation has a cash balance of $18,300 on April 1. The company must maintain a minimum cash balance of $15,000. During April, expected cash receipts are $66,000. Cash disbursements during the month are expected to total $79,000. Ignoring interes
- Sparks Corporation has a cash balance of $17,700 on April 1. The company must maintain a minimum cash balance of $14,500. During April, expected cash receipts are $65,000. Cash disbursements during the month are expected to total $77,500. Ignoring intere
- On February 1, 2017, partnership pays 6 months of office rent to cover February and the subsequent 5 months. 1. Recognize as an asset or an expense. 2. Explain.
- Larkspur Company's record of transactions concerning part X for the month of April was as follows: Purchases Sales April 1 (balance on hand) 340 @ $6.50 April 5 540 April 4 640 @ 6.63 April 12 440 Apr
- In its first month of business, a company purchased $500 worth of supplies. At the end of the month, only $270 of the supplies were still on hand. What is the appropriate month-end adjusting entry?
- April Wood Products' accounts receivable increased during the year by $4 million. a. What is the amount of cash April Wood Products received from customers during the reporting period if its sales were $44 million? b. Prepare a summary entry that represen
- Mark collects $75,000 in advance for sales on March 1, 2019. He earns the money evenly every month for 24 months at 12/31/2019. What is the balance in the deferred revenue account on his year-end balance sheet? a. $75,000 b. $46,875 c. $43,750
- On April 1, Stelter Corporation had $31,000 of raw materials on hand. During the month, the company purchased an additional $57,000 of raw materials. During April, $67,000 of raw materials were requis
- On April 1, Stelter Corporation had $40,000 of raw materials on hand. During the month, the company purchased an additional $66,000 of raw materials. During April, $76,000 of raw materials were requis
- On April 1, Stelter Corporation had $35,000 of raw materials on hand. During the month, the company purchased an additional $61,000 of raw materials. During April, $71,000 of raw materials were requis
- Zumba Rental Agency prepares monthly financial statements. On September 1, a check for $9,600 was received from a tenant for six months' rent. The full amount was credited to Rent Revenue. Prepare the adjusting entry the company should make on September 3
- During the month of August, deposits in the amount of $2,200 were received for services to be performed. By the end of the month, services in the amount of $1,520 had been performed. Prepare the necessary adjustment for Service Revenue at the end of the m
- On March 1, 2015, you created a new travel agency. The following transactions occurred during the company's first month. March 1 You invested $20,000 cash and computer equipment worth $40,000 in the company March 2 The company rented furnished Office spac
- 3. A business s debtors in March total 10 000. During the month of March, the business receives 6,000 from its debtors, and the total of debtors on 31 March is 12000. The credit sales for the month must therefore have been: .........................
Explore our homework questions and answers library
Browse
by subject