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On December 31, 2019, Krug Company prepared adjusting entries that included the following items: Depreciation expense: $31,000. Accrued sales revenue: $29,000. Accrued expenses: $12,000. Used insurance: $9,000; the insurance was initially recorded as prepaid. Rent revenue earned: $7,000; the rent was initially prepaid by the tenant and credited to unearned rent revenue. If Krug Company reported total liabilities of $110,000 prior to adjusting entries, how much are Krug's total liabilities after the adjusting entries

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Zviko

Answer:

$115,000

Explanation:

From the adjusting entries only identify those items relating to Liabilities and adjust the balance.

The Calculation of Adjusted Liabilities are as follows :

Balance before adjustments                           $110,000

Add Accrued Expenses                                    $12,000

Less Elimination of Unearned Revenue A/c    ($7,000)

Balance after adjustments                              $115,000

Note

When company finally transfers the control of a service relating to Unearned Revenue, it records the following :

Unearned Revenue $7,000 (debit)

Revenue $7,000 (credit)

Being recognition of Revenue that had been deferred.

Krug's total liabilities after the adjusting entries is $115,000

Calculation of the total liabilities:

Balance before adjustments                           $110,000

Add Accrued Expenses                                    $12,000

Less Elimination of Unearned Revenue A/c    ($7,000)

Balance after adjustments                              $115,000

Learn more about the insurance here: https://brainly.com/question/11816894

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