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Sweeney & Allen, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending
Sweeney & Allen, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December
A bank loan had been obtained on December Accrued interest on the loan at December amounts to $ No interest expense has yet been recorded.
Depreciation of the firms office building is based on an estimated life of years. The building was purchased four years ago for $
Accrued, but unbilled, revenue during December amounts to $
On March the firm paid $ to renew a month insurance policy. The entire amount was recorded as Prepaid Insurance.
The firm received $ from King Biscuit Company in advance of developing a sixmonth marketing campaign. The entire amount was initially recorded as Unearned Revenue. At December $ had actually been earned by the firm.
The companys policy is to pay its employees every Friday. Since December fell on a Wednesday, there was an accrued liability for salaries amounting to $
a Record the necessary adjusting journal entries on December
b By how much did Sweeney & Allens net income increase or decrease as a result of the adjusting entries performed in part aIgnore income taxes.
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