The Blue Chip Co.prepared the following income statement for December 31,2018 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 1,2018 that 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 that was to be paid early in January 2019.
(4. )In November 2018,the company had received $3,600 of advance payments,which were originally recorded as Unearned Revenue.One-third of this was earned in December 2018.

Question

The Blue Chip Co.prepared the following income statement for December 31,2018 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 1,2018 that 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 that was to be paid early in January 2019.
(4. )In November 2018,the company had received $3,600 of advance payments,which were originally recorded as Unearned Revenue.One-third of this was earned in December 2018.

Quizplus · Accepted Answer

The Answer of The Blue Chip Co.prepared the following income statement for December 31,2018 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 1,2018 that 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 that was to be paid early in January 2019.
(4. )In November 2018,the company had received $3,600 of advance payments,which were originally recorded as Unearned Revenue.One-third of this was earned in December 2018.