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Brokeback Towing Company is at the end of its accounting year, December 31, 2018. The following data that must be considered
Required: 1. Give the adjusting Journal entry required for each item at December 31, 2018. 2. If adjustments were not made ea
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Answer #1

Answer:-

Date

Particulars

Debit

Credit

1

Insurance Expense (576/24*6)

$144

     Prepaid Insurance

$144

2

Supplies Expense   (1,000-290)

$710

     Supplies

$710

3

Repairs and Maintenance Expense

$790

     Accounts Payable

$790

4

Accounts Receivable

$7,900

      Service Revenue

$7,900

5

Depreciation Expense

$2,700

       Accumulated Depreciation—Equipment

$2,700

6

Interest Expense

$490

      Interest Payable

$490

7

Income Tax Expense (29,000*25%)

$7,250

     Income Tax Payable

$7,250

2

Un-adjusted expenses = 144+710+790+2,700+490+7,250= $12,084

Net adjustment to income = 12,084-7,900 = $4,184

Broke back’s net income overstated by $4,184

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