Question

Unadjusted net income equals $7,500. Calculate what net income will be after the following adjustments: 1. Salaries payable to employees, $700 2. Interest due on note payable at the bank, $80 3. Unearned revenue that has been earned, $950 4. Supplies used, $215 Adjusted net income amounts to $

Answer 1

Adjusted net income amounts to $ 7,455

Unadjusted Income	$ 7,500.00
Less: Salaries expense adjustment	$   (700.00)
Less: Interest expense due on notes payable	$     (80.00)
Less: Supplies expense adjustment	$   (215.00)
Add: Revenue earned	$     950.00
Adjusted Net income	$ 7,455.00

.

Salaries payable will be recorded as an expenses for current year and liability for next year.

Revenue earned out of unearned revenue will reduce unearned revenue balance and increase net income automatically by increase in revenue earned.

Supplies used is an expense and will reduce net income

Interest on band note will be treated as expense , not due but accrued.