End-Of-Period Adjustments-Effect on Net Income

question 144

Essay

End-of-period adjustments-effect on net income
Before making any year-end adjusting entries, the revenues of Hot Jazz Studio exceeded expenses by $127,000. However, the following adjustments are necessary:
(A.) Prepaid rent consumed, $1,500.
(B.) Services rendered to clients but not yet billed, $20,000.
(C.) Interest accrued on notes payable, $1,100.
(D.) Depreciation, $4,800.
(E.) Accrued wages payable, $3,900.
(F.) Fees collected in advance which have now been earned, $7,100.
Complete the schedule to determine the net income of Hot Jazz Studio after these adjustments have been recorded. Show the effect of each adjustment in the space provided. Compute net income after adjustments and place answer in space provided.

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Definitions:

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