A company has a fiscal year-end of December 31: (1) on October 1, $27,000 was paid for
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A company has a fiscal year-end of December 31: (1) on October 1, $27,000 was paid for a one-year fire insurance policy; (2) on June 30 the company lent its chief financial officer $25,000; principal and interest at 7% are due in one year; and (3) equipment costing $75,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $15,000 per year.
If the adjusting entries were not recorded, would net income be higher or lower and by how much?
Related Book For
Basic Finance An Introduction to Financial Institutions Investments and Management
ISBN: 978-1111820633
10th edition
Authors: Herbert B. Mayo
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