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UGBA 102A Lecture Notes - Lecture 4: Income Tax, Asset Turnover, Net IncomeExam

Business Administration Undergraduate Program
Course Code
Study Guide

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Kousha Modanlou
September 21, 2018
Homework 4: Page 195 Q 1,3; Page 196 MC 3, 7; Page 209 E4-19
Page 195
Q1. The purpose of recording adjusting entries is to to update accounts to conform with the
accrual concept by make adjustments at the end of the accounting period to measure all revenues
and expenses of that period.
Q3. A contra-asset is an account that is an offset to, or reduction of, the primary account. An
example of one is accumulated depreciation of an asset.
Page 196
MC3. B
MC7. D
Page 209
Debit Credit
1. a. Salaries and wages expense $730
Salaries and wages payable $730
b. Telephone expenses $440
Telephone expenses payable $440
c. Depreciation expense $24,000
Accumulated Depreciation $24,000
d. Interest expense $300
Interest payable $300
e. Maintenance expenses $1,100
Supplies $1,100
f. No entry required. Revenue is earned in January of next year; entry in upcoming period
g. Income tax expense $5,800
Income tax payable $5,800
2. Adjusted Income Statement
Rental Revenue: $109,000
Salaries and wages expense 27,230
Maintenance expense` 13,100
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