Question

6	Time to prepare an income statement for Company TAC,
	this is for the Month Ending October 31, 2017
		Cash			$    17,000
		Salary Payable			$      3,100
		Service Revenue			$    44,500
		Salary expense			$    12,600
		Rent Expense			$      3,600
		Unearned Revenue			$      1,300
		Utility Expense			$      1,700
		Accounts Receivable			$      4,100
		Supplies Expense			$          825
7	During class we completed problems in Chapter 5
	involving accounts receivable transactions and customer
	sub ledger accounts.   Explain the purpoe of the
	Account Receivable Schedule that we prepred for
	both problems from Chapter 5.
8	The Lewis Company pays their employees every Friday.
	The weekly salaries for a five day workweek is $22,250.
	Assume that Sept 30th this month is a Wednesday.
	Prepare the adjusting journal entry for salary expense on
	Sept 30th (the employees will be paid on Friday Oct 2).

Answer 1

Income statement for TAC Company(6)

Accounts	Debit	Credit
Cash	$17,000
Salary payable		$3,100
Service revenue		$44,500
Salary expense	$12,600
Rent expense	$3,600
Unearned revenue		$1,300
Utilityexpense	$1,700
Accounts receivable	$4,100
Supplies expense	$825

Total 39825 48900

Expenses like rent expense, cash paid ,utility expenses are being debited and the revenues like service revenue, unearned revenue are being credited because they are the incomes to be received in the future and salary payable is being is being credited since it is an obligation.

In order to find net income the formula is:Total Revenue-Total expenses So, Net Income=48900-39825 =9075

7.The schedule accounts receivable displays the amount which is due from the customers. Purpose: The main purpose behind preparing accounts receivable schedule is to know the amount to be collected from the customers.What is the credit amount to be collected.How much of amount to be received has become bad i.e,bad debts(it is the amount which cannot be recovered from the customers).

8. Adjusting entry for Salary expense

Date Particulars Debit Credit

Sept 30 Salary expense a/c...dr $22,250

To salary payable a/c $22,250

(Being salary expense adjusted to salary payable)