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By how much would net income be higher or lower

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Reference no: EM133006163

Wildcat Corporation has a fiscal year-end of December 31. Please review the following transactions:

  1. On October 1, the insurance premium of $19,000 was paid for a one-year fire insurance policy.
  2. On June 30, the company advanced its chief financial officer $17,000; principal and interest at 7% on the note are due in one year.
  3. Equipment costing $67,000 was purchased at the beginning of the year for cash. Depreciation on the equipment is $13,400 per year.

Problem 1: If the adjusting entries were not recorded, would net income be higher or lower and by how much?

Reference no: EM133006163

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