End-Of-Period Adjustments-Effect on Net Income

question 56

Essay

End-of-period adjustments-effect on net income
Ocean View, Inc. reported revenues of $645,000 and expenses of $360,000 for the month of May, before making any month-end adjusting entries. The following data are provided regarding adjusting entries:
(A.) Portion of insurance expiring in May, $2,520.
(B.) A customer has used the facilities for two weeks in May; the fee of $4,200 has not yet been billed.
(C.) Amount owed for salaries accrued in the last week of May, $1,650.
(D.) Depreciation on equipment for May $1,290.
(E.) Supplies used in May, $13,125.
(F.) Fees collected in advance which have been earned during May, $23,400.
Complete the schedule to determine the net income of Ocean View Inc. for May after these adjustments have been recorded. Begin your schedule with income before adjusting entries and then show the effect of each adjustment to arrive at net income after adjustment.

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Definitions:

Creative Customer Service

Innovative approaches to providing support and care to customers, aiming to exceed expectations and solve problems uniquely.

Gain-Sharing Plans

A performance-based compensation strategy that shares the cost savings from productivity improvements with employees.

Repeat Business

The recurrence of customer purchases due to satisfaction with a product or service, contributing to the company's revenue over time.

Attendance Plans

Policies or programs established by an organization to manage employee attendance, including tracking, incentives for good attendance, and consequences for excessive absenteeism.