Laser Recording Systems produced disks for use in the home market. The following is an excerpt from
Question:
Laser Recording Systems produced disks for use in the home market. The following is an excerpt from Laser Recording Systems’ financial statements (all dollars in thousands).
Instructions
a. Can you tell from the discussion whether Laser Recording Systems has prepaid its legal expenses and is now making an adjustment to the asset account Prepaid Legal Expenses, or whether the company is handling the legal expense via an accrued expense adjustment?
b. Identify each of the adjustments Laser Recording Systems is discussing as one of the four types of possible adjustments discussed in the chapter. How is net income ultimately affected by each of the adjustments?
c. How did Laser Recording record the accrued interest?
Step by Step Answer:
Accounting Tools For Business Decision Making
ISBN: 9780470377857
3rd Edition
Authors: Paul D. Kimmel