Tims Donuts has 10 employees who are paid $20 per hour. The company purchases its inventory, on
Question:
Tim’s Donuts has 10 employees who are paid $20 per hour. The company purchases its inventory, on account, daily. At December 31, 2021, each of Tim’s Donuts’ 10 employees had worked 15 hours, which had not been paid or recorded. Also on this date, the company had taken receipt of $80,400 of inventory from its suppliers, which had not been recorded in the accounts. As of the beginning of 2021, the company had equipment that had been previously purchased for $2,650,000. The equipment is depreciated at $265,000 per year. Prior to adjustments, the company’s trial balance showed $310,550 in the wage expense account and $110,375 of inventory.
Questions
If Tim’s Donuts makes the appropriate adjusting entry, how much will be reported for wages expense on the income statement for the year ending December 31, 2021?
If Tim’s Donuts makes the appropriate adjusting entry, how much will be reported on the December 31, 2021 balance sheet as inventory?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill