Question

Company's December 31, 2028 unadjusted trial
balance reported the following accounts:

|||Accounts Payable ............  $54,000|||
|||Accounts Receivable .........  $47,000|||
|||Advertising Expense .........  $21,000|||
|||Cash ........................  $18,000|||
|||Common Stock ................  $73,000|||
|||Cost of Goods Sold ..........  $41,000|||
|||Dividends ...................  $10,000|||
|||Equipment ...................  $68,000|||
|||Income Tax Expense ..........  $20,000|||
|||Interest Revenue ............  $46,000|||
|||Inventory ...................  $55,000|||
|||Mortgage Payable ............  $51,000|||
|||Retained Earnings ...........  $36,000 |||(at January 1, 2028)
|||Sales Revenue ...............  $93,000|||
|||Supplies ....................  $28,000|||
|||Trademark ...................  $49,000|||
|||Unearned Revenue ............  $33,000|||
|||Wage Expense ................  $29,000|||

Company has not yet recorded an adjusting entry
to record $9,000 of supplies that were used up during
2028.

Calculate :net income that Company
would report in its 2028 income statement after the
appropriate adjusting entry is made to record the
used up supplies.

Answer 1

Preparing Adjusting Entry:-

Company

General Journal

December 31,2028

Date	Accounts Title and Explanation	Debit	Credit
December 31	Supplies Expense	$9,000
	Supplies		$9,000
	(To adjust Supplies Expense)

Calculations for Supplies Adjusted Balance:-

Supplies Adjusted Balance=(Supplies- Supplies Expense)

=($28,000-$9,000)

=$19,000

Calculations for Net Income for Company by Preparing Income Statement:-

Company

Income Statement

December 31,2028

Accounts	Amount	Amount
Revenues:-
Sales Revenue	$93,000
Interest Revenue	46,000
Total Revenues		$139,000
Less:- Expenses
Cost of Goods Sold	$41,000
Advertising Expense	21,000
Supplies Expense	9,000
Wage Expense	29,000
Income Tax Expense	20,000
Total Expenses		($120,000)
Net Income		$19,000

So the Net Income that Company would report in its 2028 Income Statement after the appropriate Adjusting Entry is made to record the used up Supplies is $19,000.