Question
Skysong Industries collected $ 92,400 from customers in 2022. Of the amount collected, $ 22,000 was for services performed in 2021. In addition, Skysong performed
Skysong Industries collected $ 92,400 from customers in 2022. Of the amount collected, $ 22,000 was for services performed in 2021. In addition, Skysong performed services worth $ 35,200 in 2022, which will not be collected until 2023. Skysong Industries also paid $ 63,360 for expenses in 2022. Of the amount paid, $ 26,400 was for expenses incurred on account in 2021. In addition, Skysong incurred $ 36,960 of expenses in 2022, which will not be paid until 2023. (a) Compute 2022 cash-basis net income.
Cash-basis net income | $ enter the cash-basis net income in dollars |
(b) Compute 2022 accrual-basis net income.
Accrual-basis net income | $ enter the accrual-basis net income in dollars |
3.Blue Spruce Company has the following balances in selected accounts on December 31, 2022.
Accounts Receivable | $ 0 | |
Accumulated DepreciationEquipment | 0 | |
Equipment | 11,200 | |
Interest Payable | 0 | |
Notes Payable | 16,000 | |
Prepaid Insurance | 3,360 | |
Salaries and Wages Payable | 0 | |
Supplies | 3,920 | |
Unearned Service Revenue | 48,000 |
All the accounts have normal balances. The following information has been gathered at December 31, 2022.
1. | Blue Spruce Company borrowed $ 16,000 by signing a 12%, 1-year note on September 1, 2022. Interest will be paid when the note is repaid. | |
2. | A count of supplies on December 31, 2022, indicates that supplies of $ 1,440 are on hand. | |
3. | Depreciation on the equipment for 2022 is $ 1,600. | |
4. | Blue Spruce paid $ 3,360 for 12 months of insurance coverage on June 1, 2022. | |
5. | On December 1, 2022, Blue Spruce collected $ 48,000 for consulting services to be performed evenly from December 1, 2022, through March 31, 2023. | |
6. | Blue Spruce performed consulting services for a client in December 2022. The client will be billed $ 6,720. | |
7. | Blue Spruce pays its employees total salaries of $ 14,400 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2022. |
Prepare adjusting entries for the seven items described above. Blue Spruce prepares adjustments annually. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
No. | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
1. | Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount | |
2. | Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount | |
3. | Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount | |
4. | Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount | |
5. | Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount | |
6. | Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount | |
7. | Enter an account title | Enter a debit amount | Enter a credit amount |
Enter an account title | Enter a debit amount | Enter a credit amount |
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