ACCHAPTER 43 - 4-36(15 min.)CURRAN COMPANYIncome...

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Unformatted text preview: 4-36(15 min.)CURRAN COMPANYIncome StatementFor the Year Ended May 31, 20X6(In Thousands)Sales$1,800Cost of goods sold1,000Gross profit$800Operating expenses:Wages$400Utilities110Depreciation60570Operating income$230Other revenues and expenses:Interest expense$138Rent revenue$20Interest revenue284890*Income before income taxes$ 140Income taxes (@40%)56Net income$ 84* Call attention to this side-by-side presentation of subtotals, a popular practice among accountants.4-37(25-35 min.) For each transaction, the first entry is for Baker; the second entry is for the other entity.1.(a)Five months' rent is 5/12 x $24,000 = $10,000.A= L+ SEPrepaidRentRentExpenseRent expired, Baker10,000=10,000UnearnedRentRentRevenueRevenueRent earned, landlord=10,000+10,000(b)Three months' services rendered, 3/12 x $12,000 = $3,000.A=L+ SEUnearnedFeeFeeRevenueRevenueFees earned, Baker=3,000+3,000PrepaidLegalExpensesExpensesFees for services received, client3,000=3,0004-37(continued)(c)A= L+ SEAccrued...
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This note was uploaded on 06/20/2010 for the course FINA 6266 taught by Professor Burt during the Spring '10 term at University of Arkansas for Medical Sciences.

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ACCHAPTER 43 - 4-36(15 min.)CURRAN COMPANYIncome...

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