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Unformatted text preview: 4-25(10 min.)1.Wage expense (or vacation pay expense)40Accrued salaries and related benefits40To record accrual of vacation pay.2.Accrued salaries and related benefits2,000Cash2,000To record payment of vacation pay.4-26(10-15 min.) Jupiter Company made less net income. Each company made the same operating income:CompanyJupiterSaturnSales$600,000$600,000Operating Expenses525,000525,000Operating income$ 75,000$ 75,000Interest expense8,000Net income$ 67,000$ 75,000Each company used the same amount of assets and incurred identical revenues and expenses except for interest. Their operatingmanagement produced identical operating results. However, their financialmanagement employed different strategies. Placing interest below the operating income line and not mixing it with other expenses highlights the difference between the two companies.4-28(15-20 min.) Amounts are stated in thousands.1.Issued capital stock for cash, $10....
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- Spring '10
- Income Statement, Expense, Generally Accepted Accounting Principles, unearned fee revenue