2.99 See Answer

Question: On September 30, 20X1, after one month


On September 30, 20X1, after one month of operation, the general ledger of Cross Country Travels contained the accounts and balances shown below.
INSTRUCTIONS
1. Prepare a partial worksheet with the following sections: Trial Balance, Adjustments, and Adjusted Trial Balance. Use the data about the firm’s accounts and balances to complete the Trial Balance section.
2. Enter the adjustments described below in the Adjustments section. Identify each adjustment with the appropriate letter. (Some items may not require adjustments.)
3. Complete the Adjusted Trial Balance section.
ACCOUNTS AND BALANCES



On September 30, 20X1, after one month of operation, -1




On September 30, 20X1, after one month of operation, -2

ADJUSTMENTS
a. On September 30, an inventory of the supplies showed that items costing $605 were on hand.
b. On September 1, the firm paid $4,200 in advance for three months of rent.
c. On September 1, paid $3,900 in advance for six months of insurance.
d. On September 1, the firm paid $450 in advance for three months of advertising. The ads started running in September.
e. On September 1, the firm purchased office furniture for $4,840. The furniture is expected to have a useful life of 10 years and a salvage value of $280.
f. On September 3, the firm purchased equipment for $9,000. The equipment is expected to have a useful life of six years and a salvage value of $1,080.
g. On September 1, the firm issued a two-month, 6 percent note for $20,000.
h. During September, the firm received $22,000 of fees in advance. An analysis of the firm’s records shows that $5,000 applies to services provided in September and the rest pertains to future months.
Analyze: What was the net dollar effect on net income of the adjustments to the accounting records of the business?

2.99

See Answer