Answered step by step
Verified Expert Solution
Question
1 Approved Answer
all help appreciated Brokeback Towing Company is at the end of its accounting year, December 31, 2018. The following data that must be considered were
all help appreciated
Brokeback Towing Company is at the end of its accounting year, December 31, 2018. The following data that must be considered were developed from the company's records and related documents a On July 1, 2018, a two-year insurance premium on equipment in the amount of $720 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1. b. At the end of 2018, the unadjusted balance in the Supplies account was $1.120. A physical count of supplies on December 31, 2018, indicated supplies costing $360 were still on hand. c On December 31, 2018, YY's Garage completed repairs on one of Brokeback's trucks at a cost of $860. The amount is not yet recorded. It will be paid during January 2019 d On December 31, 2018, the company completed a contract for an out-of-state company for $8,010 payable by the customer within 30 days. No cash has been collected and no journal entry has been made for this transaction. e On July 1. 2018, the company purchased a new hauling van Depreciation for July-December 2018, estimated to total $2.810, has not been recorded As of December 31, the company owes interest of $560 on a bank loan taken out on October 1, 2018 The interest will be paid when the loan is repaid on September 30, 2019. No interest has been recorded yet g. Assume the income after the preceding adjustments but before income taxes was $36,000. The company's federal income tax rate is 15%. Compute and record income tax expense. Required: Indicate the accounting equation effects (amount and direction) of each adjusting journal entry. Provide an appropriate account name for any revenue and expense effects. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) Stockholders' Equity Liabilities Transaction AssetsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started