The net income of Cruz', a department store, decreased sharply during 20X5. Mark Cruz, owner of the store anticipates the need for a bank loan in 20X6. Late in 20X5 he instructed the accountant to record a P26,000 of furniture to the Cruz family, even though the goods will not be shipped from the manufacturer until January 20X6. Cruz also told the accountant not to make the following December 31, 20X5, adjusting entries: Salaries owed to employees 18,000 Prepaid insurance that has expired 5,300 Compute the overall effect of these transactions on the store's reported income for 20X5.
The net income of Cruz', a department store, decreased sharply during 20X5. Mark Cruz, owner of the store anticipates the need for a bank loan in 20X6. Late in 20X5 he instructed the accountant to record a P26,000 of furniture to the Cruz family, even though the goods will not be shipped from the manufacturer until January 20X6. Cruz also told the accountant not to make the following December 31, 20X5, adjusting entries: Salaries owed to employees 18,000 Prepaid insurance that has expired 5,300 Compute the overall effect of these transactions on the store's reported income for 20X5.
Chapter6: Business Expenses
Section: Chapter Questions
Problem 43P
Related questions
Question
The net income of Cruz', a department store, decreased sharply during 20X5. Mark Cruz, owner of the store anticipates the need for a bank loan in 20X6. Late in 20X5 he instructed the accountant to record a P26,000 of furniture to the Cruz family, even though the goods will not be shipped from the manufacturer until January 20X6. Cruz also told the accountant not to make the following December 31, 20X5,
Salaries owed to employees 18,000
Prepaid insurance that has expired 5,300
- Compute the overall effect of these transactions on the store's reported income for 20X5.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning