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How do I calculate impact on net income? Isaac Carter opened a business called Carter Engineering and recorded the following transactions in its first month
How do I calculate impact on net income?
Isaac Carter opened a business called Carter Engineering and recorded the following transactions in its first month of operations. Jun. 1 Isaac Carter, the owner, invested $138,000 cash, office equipment with a value of $14,500, and $79,000 of drafting equipment to launch the company in exchange for common stock. Jun. 2 The company purchased land worth $58,500 for an office by paying $19,600 cash and signing a long-term note payable for $38,900. Jun. 2 The company purchased a portable building with $45,500 cash and moved it onto the land acquired on June 2. Jun. ? The company paid $8,700 cash for the premium on a 15-month insurance policy. Jun. 7 The company completed and delivered a set of plans for a client and collected $13,800 cash. Jun. 12 The company for $12,400. purchas $31,400 of additional drafting equipment by paying $19,000 cash and signing a long-term note payo Jun. 14 The company completed $29,200 of engineering services for a client. This amount is to be received in 30 days. Jun. 15 The company purchased $2,100 of additional office equipment on credit. Jun. 17 The company completed engineering services for $25,800 on credit. Jun. 18 The company received a bill for rent of equipment that was used on a recently completed job. The $2,250 rent cost must be within 30 Jun. 21 The company paid $2,000 cash for wages to a drafting assistant. Jun. 23 The company paid $2,100 cash to settle the account payable created on June 15. Jun. 24 The company paid $1,400 cash for minor maintenance of its drafting equipment. Jun. 26 The company paid $9,860 cash in dividends. Jun. 28 The company paid $2,000 cash for wages to a drafting assistant. Jun. 30 The company paid $3,260 cash for advertisements on the web during June. Jun. 20 feet companie coniected $12,6 odavash in partial payment from the client billed on June 14. Descriptions of items that require adjusting entries on June 30, follow. a) The company has completed, but not yet billed, $13,600 of engineering services for a client. b) Straight-line depreciation on the office equipment, assuming a 5-year life and a $2,800 salvage value, is $230 per month. C) Straight-line depreciation on the drafting equipment, assuming a 5-year life and a $11,400 salvage value, is $1,650 per month. d) Straight-line depreciation on the building, assuming a 25-year life and a $12,500 salvage value, is $110 per month. e) The balance in prepaid insurance represents a 15-month policy that went into effect on June 1. f) Accrued interest on the long-term note payable is $150. g) The drafting assistant is paid $2,000 for a 5-day work week. 2 days' wages have been incurred but are unpaid as of month-end. found on the income statement tab. (Hint: Select unadjusted on the drop-down.) Show Adjusted Impact on net income Adjusting entry related to: a) Unbilled fees b) Depreciation of office equipment c) Depreciation of drafting equipment Account affecting the: Income Statement Balance Sheet Engineering fees earned Accounts receivable Depreciation expense - Office Accumulated depreciation - equipment Office equipment Depreciation expense - Accumulated depreciation - Drafting equipment Drafting equipment Depreciation expense - Accumulated depreciation - Building Building Insurance expense Prepaid insurance Interest expense Interest payable Wages expense Wages payable d) Depreciation of building e) Prepaid insurance f) Accrued interest g) Unpaid wages 0 $ 0 Had the adjustments not been prepared, income would have been understated by 0 Balance Sheet Impact on IncomeStep by Step Solution
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