Blessing Home Company issued financial statements for the year ended December 31, but failed to include...

 

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Blessing Home Company issued financial statements for the year ended December 31, but failed to include the following adjusting entries: A. Accrued interest revenue earned of $1,200. B. Depreciation expense of $4,000. C. Portion of prepaid insurance (an asset) expired $1,100. D. Accrued taxes expense of $3,200. E. Revenues of $5,200, originally recorded as unearned, have been earned by the end of the year. Required 1. Determine the effects of each adjusting entry on the assets, liabilities, equity and net profit and their correct amounts for the December 31 financial statements by completing the following table: Balance Sheet Income Statement Assets $350,000 Liabilities Equity $150,000 Net Profit Reported amounts.. Add (subtract) to correct for item: A. B. $200,000 S70,000 E. Corrected amounts.. (Please copy the table in your answer and fill in the amounts added/(subtracted) to arrive at the corrected amounts.) ....... (16 marks) 2. What is the usual order in which the four financial statements are prepared from the adjusted trial balance? (2 marks) 3. Debora Plant is an owner of Blessing Home. Please briefly explain the two general accounting principles related to recognition of revenue and expense under the accrual basis accounting. (2 marks) Blessing Home Company issued financial statements for the year ended December 31, but failed to include the following adjusting entries: A. Accrued interest revenue earned of $1,200. B. Depreciation expense of $4,000. C. Portion of prepaid insurance (an asset) expired $1,100. D. Accrued taxes expense of $3,200. E. Revenues of $5,200, originally recorded as unearned, have been earned by the end of the year. Required 1. Determine the effects of each adjusting entry on the assets, liabilities, equity and net profit and their correct amounts for the December 31 financial statements by completing the following table: Balance Sheet Income Statement Assets $350,000 Liabilities Equity $150,000 Net Profit Reported amounts.. Add (subtract) to correct for item: A. B. $200,000 S70,000 E. Corrected amounts.. (Please copy the table in your answer and fill in the amounts added/(subtracted) to arrive at the corrected amounts.) ....... (16 marks) 2. What is the usual order in which the four financial statements are prepared from the adjusted trial balance? (2 marks) 3. Debora Plant is an owner of Blessing Home. Please briefly explain the two general accounting principles related to recognition of revenue and expense under the accrual basis accounting. (2 marks)

Answer rating: 100% (QA)

1 Balance sheet Income statement Assets Liabilities Equity Net profit Reported amounts 350000 200000 ... View the full answer