E4-13 Dyer Inc completed its first year of operations on December 31, 2010. Because this is the end of the annual accounting period, the company bookkeeper prepared the following preliminary statements
Rental revenue $141,000
Income revenue:
Salaries and wages expense 28500
Maintenance expense 12000
Rent expense 9000
Utilities expense 4000
Gas and oil expense 3000
Other expenses 1000
Total expenses 57500
Income $56500
You are an independent CPA hired by the company to audit the firms accounting systems and financial statements. In your audit, you developed additional data as follows:
A) Wages for the last three days of December amounting to $310 were not recorded or paid
b)The $400 telephone bill for December 2010 has not been recorded or paid
c) Depreciation on rental autos amounting to $23000 for 2010 was not recorded
d)Interest of $500 was not recorded on the note payable by Dyer inc
e) The rental revenue account included $4000 of revenue to be earned in January 2010
f) Maintenance supplies costing $600 were used during 2010 but this has not been recorded
f) The income tax expense for 201 is $7000 but wont actually be paid until 2011.
Required:
1) What adjusting journal entry for each item a) through G) should be recorded at December 31, 2010?
2) Prepare in proper form, an adjusted income statement for 2010
3) Did the Adjustment have a significant overall affect on the company's net income?
Click here for the solution: Dyer Inc completed its first year of operations on December 31, 2010
