Prior to recording adjusting entries, revenues exceed expenses by $60,000. Adjusting entries for accrued wages of $5,000 and depreciation expense of $5,000 were made. Profit for the year would be:
A) $60,000.
B) $55,000.
C) $50,000.
D) None of the above.

Question

Quizplus · Accepted Answer

The profit before adjustments is $60,000. After adjusting for accrued wages and depreciation expense, which total $10,000, the profit is reduced to $50,000.

Prior to Recording Adjusting Entries, Revenues Exceed Expenses by $60,000