The required adjusting entries on January 31 decreased net income by a total of

Question

The required adjusting entries on January 31 decreased net income by a total of _________?

X Company prepares monthly financial statements. The following transactions occurred during January: 1. On January 1, a one-year store renta eae as signed for a total of $33,600, and rent for the first 2 months was paid in advance. 2, on January 1, equipment was purchased for $55,000 with a downpayment of $5,500 and a note for the remainder. The note along with annual interest of 8% was due in a year. The estimated life of the equipment is 10 years with a salvage value of $6,000. 3. Daily wages are $1,600 and are paid every Friday. The last day in January was a Tuesday

Explanation / Answer

Rent 2800 =33600/12 Depreciation expense 408 =(55000-6000)/10/12 Interest expense 330 =49500*8%/12 Wages expense 6400 =1600*4 Decrease in net income 9938

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