Solution-Compute the amount of net income or net loss

Compute the amount of net income or net loss

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Reference no: EM133094987

Question - Choose a company and obtain its annual report. Assume the company accountants failed to make four adjustments at the end of the current year. For illustrative purposes, we shall assume that the amounts reported for the related assets and liabilities are incorrect. Adjustments omitted:

a. Amortization/Depreciation of equipment, $800,000.

b. Salaries owed to employees but not yet recorded or paid $230,000.

c. Prepaid expenses used up during the year, $100,000.

d. Accrued sales (or service) revenue, $140,000.

Required -

1. Compute the correct amounts for the following balance sheet items:

A. Book value of capital assets

B. Total liabilities

C. Prepaid expenses

D. Accounts receivable

2. Compute the amount of net income or net loss that the company would have reported if the accountants had recorded these transactions properly. Ignore income tax.

Reference no: EM133094987

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Compute the amount of net income or net loss

Reference no: EM133094987

Reference no: EM133094987

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