The following account balances were taken from ABC Company’s unadjusted trial ba
ID: 2333580 • Letter: T
Question
The following account balances were taken from ABC Company’s unadjusted trial balance at December 31, 2020: Accounts Payable ............ $56,000 Accounts Receivable ......... $42,000 Cash ........................ $11,000 Common Stock ................ $63,000 Cost of Goods Sold .......... $52,000 Income Tax Expense .......... $12,000 Insurance Expense ........... $21,000 Inventory ................... $70,000 Land ........................ $68,000 Mortgage Payable ............ $49,000 Patent ...................... $31,000 Prepaid Insurance ........... $17,000 Rental Revenue .............. $46,000 Retained Earnings ........... $72,000 (at January 1, 2020) Sales Revenue ............... $95,000 Supplies .................... $19,000 Wage Expense ................ $38,000 ABC Company has not yet recorded adjusting entries related to the following two items: (1) $11,000 of supplies were used up during 2020. (2) ABC Company has provided services to a customer totaling $14,000 as of December 31, 2020. However, the customer has not yet paid ABC Company. Calculate the net income reported by ABC Company for 2020 after the appropriate adjusting entries have been recorded and posted.
Explanation / Answer
Revenues: Sales Revenue 109000 =95000+14000 Rental Revenue 46000 155000 Expenses: Cost of Goods Sold 52000 Wage Expense 38000 Supplies expense 11000 Insurance Expense 21000 Income Tax Expense 12000 Total Expenses 134000 Net income 21000