Company Reported net income Of $ 60,000 for the year ended Dec 31, 2007. Some adjustment has to be done before reports goes to Head office.
A)The unexpired insurance premium at year end totaled $450. The total insurance premium was debited to the Insurance Expense Account during the year.

b)Rent revenue of $250 was received in advance and creditedto the Rent revenue account.

c) Accured interest earned on investment amounted to $210, but the amount wasn't recorded.

d)Office supplies expense for the year amounted to $650. The firm debits an asset account whenever office supplies are purchased. The entry for supplies used must be made at the year end.

E)Depreciation Of $370 on machinery wasn't recorded

F) Semiannual bond payable interest of $1700was paid, but the amount wasn't recorded.

Prepare a statement for the year ended December 31, 2007

A: Debit Prepaid Insurance for 450
Credit Insurance expense for 450

B: Debit Rent Revenue for 250
Credit Unearned Rent Revenue for 250

C: Debit Interest Receivable for 210
Credit Interest Revenue for 210

D: Debit Office Supplies Expense for 650
Credit Office Supplies for 650

E: Debit Depreciation Expense for 370
Credit Accumulated Depreciation - Machinery for 370

F: Debit Interest Expense for 1,700
Credit Cash for 1,700

On Net Income add the Revenues and Expense account Credits, then deduct the Expense Account Debits and the Revenue Account Debits to find the corrected Net Income

REVENUE

ADD: ACCURED INTEREST 210
UNEXPIRED iNSURANCE 450
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660

EXPENSES
DEDUCT: DEPRECIATION 370
BOND INTEREST PAYABLE 1700
RENT REVENUE 250
OFFICE SUPPLIES 650
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2970
SO MY NEW CORRECTED AMOUNT WILL BE 60000+660-2970= 57690