ABC company had the following information prior to any adjusting and closing entries for the YEAR ended
Question:
ABC company had the following information prior to any adjusting and closing entries for the YEAR ended December 31, 2022:
ABC paid cash for rent covering the period July 1, 2022 to June 30, 2024.
The total cost was $18,000.
The amount was put into Prepaid rent on July 1, 2022 when the cash was paid.
ABC purchased insurance for the period covering January 1, 2022 to December 31, 2024.
The total cost of the insurance was $36,000.
The amount was put into prepaid insurance on January 1, 2022 when the cash was paid.
ABC purchased a new company vehicle for cash on September 30, 2022.
The cost of the vehicle was $36,000.
The depreciation on the vehicle is $1,000 per month.
No depreciation expense has been taken yet on this vehicle.
ABC has seven employees on its payroll.
The employees are paid every two weeks.
The total cash paid to the employees every two weeks is $10,000 (this is the TOTAL, not per employee).
Since the last pay, 25% of the two weeks has elapsed.
ABC's total revenue for the year was $125,000.
Total expenses (including any expenses related to the adjusting entries above) were $110,000.
Prior to any closing entry, the retained earnings for ABC was $400,000.
Question
What should the balance in Prepaid Rent be after any adjusting entries on December 31, 2022?
What is the total rent expense for the year ended December 31, 2022?
What should be the balance in prepaid insurance on December 31, 2022?
What should be the insurance expense for the year ended December 31, 2022?
What should be the depreciation expense for the new equipment for the year ended December 31, 2022?
What should the balance in Accumulated Depreciation be on December 31, 2023?
What should be the accrued payroll liability as of December 31, 2022?
In order to account for the $10,000 payroll paid in early January, 2023, the entry will include how much for payroll expense?
What is ABC's net income for the year ended December 31, 2022?
After the appropriate closing entries are made, what will be ABC's retained earnings balance be?
Expert Answer:
To answer the questions we will analyze each item separately and calculate the relevant balances and expenses 1 Prepaid Rent The rent cost of 18000 co... View the full answer
