Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Brokeback Towing Company is at the end of its accounting year, December 31, 2021. The following data that must be considered were developed from

image text in transcribedimage text in transcribed

Brokeback Towing Company is at the end of its accounting year, December 31, 2021. The following data that must be considered were developed from the company's records and related documents: a. On July 1, 2021, a two-year insurance premium on equipment in the amount of $760 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1. b. At the end of 2021, the unadjusted balance in the Supplies account was $1,160. A physical count of supplies on December 31, 2021, indicated supplies costing $380 were still on hand. c. On December 31, 2021, YY's Garage completed repairs on one of Brokeback's trucks at a cost of $880. The amount is not yet recorded. It will be paid during January 2022. d. On December 31, 2021, the company completed a contract for an out-of-state company for $8,030 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, 2021, the company purchased a new hauling van. Depreciation for July-December 2021, estimated to total $2,830, has not been recorded. f. As of December 31, the company owes interest of $580 on a bank loan taken out on October 1, 2021. The interest will be paid when the loan is repaid on September 30, 2022. No interest has been recorded yet. g. Assume the income after the preceding adjustments but before income taxes was $38,000. The company's federal income tax rate is 20%. 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.) Transaction Assets = Liabilities Stockholders' Equity . +Insurance Expense b. + Supplies Expense C. = + Repairs and Maintenance Expense d. = + Service Revenue = e. f. + Depreciation Expense +Interest Expense

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Financial Accounting

Authors: Fred Phillips, Robert Libby, Patricia Libby

4th edition

978-0073369709, 73369705, 78025370, 978-0077444846, 77444841, 978-0078025372

More Books

Students also viewed these Accounting questions

Question

The following cyloalkyne is too unstable to exist.Explain.

Answered: 1 week ago

Question

What does it mean when ????2 is 10% more than ????2?????????????

Answered: 1 week ago

Question

Compare three additional perspectives on leadership.

Answered: 1 week ago

Question

Identify traits and characteristics of successful leaders.

Answered: 1 week ago

Question

Identify behaviors of successful leaders.

Answered: 1 week ago