Constantine Corporation reported Net Income for the year ended December 31, 2019, of $23,760 then discovered that the entry to pay the rent for December in the amount of $1,600 was not journalized and posted. What is the Net Income after the correcting journal entry is journalized and posted?
A)$20,560
B)$22,160
C)$25,360
D)$23,760

Question

Quizplus · Accepted Answer

Since the entry to pay the rent for December in the amount of $1,600 was not journalized and posted, it should be recorded as an expense (debit) and a decrease in cash (credit). Therefore, the correcting journal entry would be:

Rent Expense     1,600
       Cash                  1,600

This will reduce the Net Income by $1,600.

$23,760 - $1,600 = $22,160

Thus, the correct answer is B) $22,160.

Constantine Corporation Reported Net Income for the Year Ended December