contestada

Manning Manufacturing Inc. had the following items that require adjustment at year end.

a. Salaries of $5,320 that were earned in December are unrecorded and unpaid.
b. Used $1,970 of utilities in December, which are unrecorded and unpaid.
c. Interest of $925 on a note payable has not been recorded or paid.

Required:
1. Prepare the adjusting entries needed at December 31.
2. What is the effect on the ?nancial statements if these adjusting entries are not made?

Respuesta :

Abotaiwo

Answer:

1. a. Debit   Salaries                      $5,320

       Credit  Accrued Salaries      $5,320

Being accrued salaries for December 31

 b. Debit    Utilities                      $1,970

     Credit  Accrued Utilities        $1,970

Being accrued Utilities  for December 31

  c. Debit    Interest                      $925

      Credit  Accrued Interest        $925

Being accrued Interest note payable for December 31

2.  Income statement will be overstated by the sum of $8,215

Explanation:

The are the adjusting entries needed at December 31.

1. a. Debit   Salaries                      $5,320

       Credit  Accrued Salaries      $5,320

Being accrued salaries for December 31

 b. Debit    Utilities                      $1,970

     Credit  Accrued Utilities        $1,970

Being accrued Utilities  for December 31

  c. Debit    Interest                      $925

      Credit  Accrued Interest        $925

Being accrued Interest note payable for December 31

2.  The effect on the financial statements if these adjusting entries are not made is that the income statement will be overstated by the sum of $8,215 , Below is the computation:

      Salaries                      $5,320

       Utilities                      $1,970

        Interest                      $925    

      Total expenses           $8,215    

Otras preguntas