Question

The net income reported on the income statement is $90,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,700 and accrued salaries of $1,300. Net income, as corrected, is:________.
a. $87,300
b. $90,000
c. $88,700
d. $86,000

Answer 1

Answer:

Corrected net income = $86,000

Explanation:

Given:

Net income in statement = $90,000

Supplies expense (Not deducted) = $2,700

Accrued salaries (Not deducted) = $1,300

Corrected net income = ?

Computation of Corrected net income:

Corrected net income = Net income in statement - Supplies expense (Not deducted) - Accrued salaries (Not deducted)

Corrected net income = $90,000 - $2,700 - $1,300  

Corrected net income = $86,000