Question

9. During the course of During the course of your examination of the financial statements of the Hales Corporation for the ye
• There were no supplies listed in the balance sheet under assets as all supplies are expensed immediately when purchased. Ho
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Answer #1

Solution:

Net Income reported 35000
Add: Prepaid Insurance for Next two years ($3000*2/3) 2000
Add: Supplies on hand at December 31 750
Less: Depreciation Expense for 2020 ($10000/10) -1000
Correct Net Income for 2020 36750
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