The Blue Chip Co.prepared the following income statement for December 31,2015 but neglected to make the necessary adjusting entries. Required: Prepare a corrected income statement after considering the following:
(1.)The company had purchased a truck for $4,800 on January 1,2015 which was expected to last 5 years.It was originally debited to the account "Truck" and credited to cash.
(2.)Salaries of $2,400 were owed to employees but not yet recorded.
(3.)The company owed $640 in accrued interest which was to be paid early in January 2016.
(4.)In November 2015,the company had received $3,600 of advance payments which were originally recorded as Unearned Revenue.One-third of this was earned in December,2015.

Question

The Blue Chip Co.prepared the following income statement for December 31,2015 but neglected to make the necessary adjusting entries.  Required: Prepare a corrected income statement after considering the following:
(1.)The company had purchased a truck for $4,800 on January 1,2015 which was expected to last 5 years.It was originally debited to the account "Truck" and credited to cash.
(2.)Salaries of $2,400 were owed to employees but not yet recorded.
(3.)The company owed $640 in accrued interest which was to be paid early in January 2016.
(4.)In November 2015,the company had received $3,600 of advance payments which were originally recorded as Unearned Revenue.One-third of this was earned in December,2015.

Quizplus · Accepted Answer

The Answer of The Blue Chip Co.prepared the following income statement for December 31,2015 but neglected to make the necessary adjusting entries.  Required: Prepare a corrected income statement after considering the following:
(1.)The company had purchased a truck for $4,800 on January 1,2015 which was expected to last 5 years.It was originally debited to the account "Truck" and credited to cash.
(2.)Salaries of $2,400 were owed to employees but not yet recorded.
(3.)The company owed $640 in accrued interest which was to be paid early in January 2016.
(4.)In November 2015,the company had received $3,600 of advance payments which were originally recorded as Unearned Revenue.One-third of this was earned in December,2015.