Question

Golf Academy, Inc., provides private golf lessons. Its unadjusted trial balance at December 31, 2018, follows, along with information about selected accounts. Further Information As reported on December 31 bank statement. Based on count, only $150 of supplies still exist. Of this amount, $2,500 was received for December lessons and $450 for January lessons. Account Names Debit Credit Cash $31,400 Supplies Deferred Revenue 500 $2,950 Salaries and Wages payable $2,500 for 10 28. They have not vet been paid for work on December 29 and 30. December ays of work Income Tax Payable The company has paid last year's income tax but not this year's tax Interest Payable The company has not paid the $115 of interest owed on its notes payable for the current period. This one-year note was taken out this year on December 1. This amount was contributed for common stock in prior years. This is the balance reported at the end of last year. Most customers pay cash for lessons each time they are provided, but some customers pay in advance Notes Payable (long-term) Common Stock Retained Earnings Service Revenue 13,800 1,000 2,500 49,150 Salaries and Wages Expense 35,600 orked through December 30, but did not work on December 31. This is the cost of supplies used through Novemberr 30. The company has not paid the $115 of interest owed on its notes payable for the current period The company has an average tax rate of 20% . Supplies Expense Interest Expense 1,900 Income Tax Expense Totals $69,400 $69,400 a. Calculate the adjusted net income that the company should report for the year ended December 31, 2018 . By what dollar amount did the adjustments in requirement 3 cause net income to increase or decrease? Required information Complete this question by entering your answers in the tabs below. Reg 4b Rea 4a Calculate the adjusted net income that the company should report for the year ended December 31, 2018 GOLF ACADEMY, INC. Income Statement For the Year Ended December 31, 2018 Revenues Service Revenue 49,150 Total Revenues 49,150 Expenses Salaries and Wages Expense 35,600 Supplies Expense 1.900 Total Expenses 37.500 11.650 Net Income Reg 4a Req 4b $69,400 $69,400 Totals 4-a. Calculate the adjusted net income that the company should report for the year ended December 31, 2018. 4-b. By what dollar amount did the adjustments in requirement 3 cause net income to increase or decrease? Complete this question by entering your answers in the tabs below. tes Req 4b Req 4a By what dollar amount did the adjustments in requirement 3 cause net income to increase or decrease? increased Net income by Req 4a Req 4b

Answer 1

a) Income statement

Revenue
Service revenue (49150+2500)	51650
Total revenue	51650
Expense
Supplies expense (1900+350)	-2250
Salaries and wages expense (35600+500)	-36100
Interest expense	-115
Total expense	-38465
Income before tax	13185
Income tax	-2637
Net income	10548

Net income decrease by (11650-10548) = -1102