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 companys records and related documents 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 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 On December 31, 2018, YYs Garage completed repairs on one of Brokebacks trucks at a cost of $860 The amount is not yet recorded It will be paid during January 2019 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 On July 1, 2018, the company purchased a new hauling van Depreciation for JulyDecember 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 Assume the income after the preceding adjustments but before income taxes was $36,000 The companys 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 ) blem PA4 2,3 G Saved Help Save Exit Sub Check my work 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 (96) b 720 d g

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 09, 2024

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

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 companys records and related documents:

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.
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.
On December 31, 2018, YYs Garage completed repairs on one of Brokebacks trucks at a cost of $860. The amount is not yet recorded. It will be paid during January 2019.
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.
On July 1, 2018, the company purchased a new hauling van. Depreciation for JulyDecember 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.
Assume the income after the preceding adjustments but before income taxes was $36,000. The companys 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.)

blem PA4-2,3 G Saved Help Save & Exit Sub Check my work 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 (96) b. 720 d g