Decipher Company had Service Revenue of $3,600,225 and total expense of $2,800,000 for the twelve months ended
Question:
Decipher Company had Service Revenue of $3,600,225 and total expense of $2,800,000 for the twelve months ended 12/31/2021. These values are before considering any adjustments resulting from the below items.
(i) On August 1, 2021, Decipher borrowed $615,000 from the bank at a 6% rate of interest. The loan is due May 1, 2022 with all principal and interest payable at maturity. The company’s pertinent 12/31/2021 account balances are as follows:
Note Payable $615,000 Interest Expense $0 Interest Payable $0
(ii) Decipher started 2021 with a $9,400 normal balance in its Unearned Service Revenue account. During 2021, Decipher collected $42,000 of advance payments from customers for future services. Regarding advance payments, as of 12/31/2021 Decipher has only $14,300 of services still owed to customers (due to prior advance payments) and anticipates performing these services in early 2020. The company’s pertinent 12/31/2021 account balances are as follows:
Unearned Service Revenue $51,400
(iii) Decipher has a daily payroll cost (ignoring payroll tax) of $6,000. Employee’s work Monday through Friday, and always get paid holidays. Employees are paid each Monday for the five -day workweek ending on the previous Friday and for 20X2, the first Monday payroll was on January 4th. The company’s pertinent 12/31/2021 account balances are as follows:
Salaries Expense $315,000 Salaries Payable $0
(iv) Decipher uses supplies when performing services. The company started 2021 with $22,000 of supplies on hand and during 2021 purchased $45,000 more. At 12/31/21 the supplies were counted, and it was determined that $17,000 were still on hand. The company’s pertinent 12/31/2021 account balances are as follows:
Supplies $67,000 Supplies Expense $0
What is Decipher's 2021 adjusted net income after considering the above situations?
Group of answer choices
$743,150
$714,025
$753,250
None of the answer choices provided are correct.
$742,825
$747,950
Expert Answer:
Decipher Companys Service Revenue 3600225 Total Expense 2800000 Unadjusted net income 80... View the full answer
