Mayer Corporation, a Private Company Reporting Under ASPE Has the Following

question 107

Essay

Mayer corporation, a private company reporting under ASPE has the following information available with respect to the company's operations until December 31, 2016:
1. Collected $345,000 cash for service revenue earned.
2. Paid $125,000 salaries expense, $56,000 rent expense, and $5,000 insurance expense.
3. Purchased a new vehicle for $35,000 cash on January 1, 2016. This vehicle will be depreciated over 5 years with no salvage value.
4. Accrued $16,000 for income taxes during 2016.
5. On December 31. 2016 the following adjustments were completed:
Service revenue earned but not yet collected in cash $22,500
Accrued Interest expense $4,500
Accrued Salaries expense $7,200
Mayer has a 20% income tax rate.
Instructions
Prepare an income statement and record the adjustment to income taxes.

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Definitions:

Relapse Prevention

Strategies and techniques employed to prevent a recurrence of a previous undesirable behavior or condition, such as substance abuse or a depressive episode.

Stressful Situations

Conditions or scenarios that lead to tension or anxiety in individuals.

Inhalants

Substances that are sniffed or inhaled to give a psychoactive effect, often abused for their mind-altering properties.

Perforated Nasal Septum

An abnormal hole or fissure in the nasal septum, which can be caused by injury, surgery, or substance abuse.