Question

Refer to the information in E3–8.
In E3–8, Consider the following transactions for Huskies Insurance Company:
a. Equipment costing $42,000 is purchased at the beginning of the year for cash. Depreciation on the equipment is $7,000 per year.
b. On June 30, the company lends its chief financial officer $50,000; principal and interest at 7% are due in one year.
c. On October 1, the company receives $16,000 from a customer for a one-year property insurance policy. Unearned Revenue is credited.

Required:
For each of the adjustments in E3–8, indicate by how much net income in the income statement is higher or lower if the adjustment is not recorded.



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  • CreatedJuly 15, 2014
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