Since its organization on January 1, 2001, Langle Inc failedto properly recogniz
ID: 2454871 • Letter: S
Question
Since its organization on January 1, 2001, Langle Inc failedto properly recognize accruals and prepayments. Selected accountsreveled the following information: Accruals and Prepayments NotRecognized 2001 2002 2003 Accruedexpenses $2,900 $3,000 $3,400 Prepaidexpenses 2,000 2,800 1,500 Accruedrevenue 2,750 2,500 2,700 Unearnedrevenue 4,250 4,500 4,100 Net income reported by the company was Year NetIncome (Loss) 2001 $40,000 2002 (15,000) 2003 35,000 Need to compute the net income for the years 2001,2002, and 2003 (ignore income taxes) Since its organization on January 1, 2001, Langle Inc failedto properly recognize accruals and prepayments. Selected accountsreveled the following information: Accruals and Prepayments NotRecognized 2001 2002 2003 Accruedexpenses $2,900 $3,000 $3,400 Prepaidexpenses 2,000 2,800 1,500 Accruedrevenue 2,750 2,500 2,700 Unearnedrevenue 4,250 4,500 4,100 Net income reported by the company was Year NetIncome (Loss) 2001 $40,000 2002 (15,000) 2003 35,000 Need to compute the net income for the years 2001,2002, and 2003 (ignore income taxes)Explanation / Answer
2001
2002
2003
2001
2002
2003
Net Income /( Loss ) 40,000.00 (15,000.00) 35,000.00 Less: Accrued Expenses (2,900.00) (3,000.00) (3,400.00) Add: Prepaid Expenses 2,000.00 2,800.00 1,500.00 Less : Prepaid Expenses of last year (2,000.00) (2,800.00) Add: Accrued Revenue 2,750.00 2,500.00 2,700.00 Less: Unearned Revenue (4,250.00) (4,500.00) (4,100.00) Add: Unearned Revenue of last year 4,250.00 4,500.00 NetIncome 37,600.00 (14,950.00) 33,400.00