Sawyer Corporation, a private company reporting under ASPE has the following information available with respect to the company's operations until December 31, 2021:
1. Collected $ 345,000 cash for service revenue earned.
2. Paid $ 125,000 salaries expense, $ 56,000 rent expense, and $ 5,000 insurance expense.
3. Purchased a new vehicle for $ 35,000 cash on January 1, 2021. This vehicle will be depreciated over 5 years with no salvage value.
4. Accrued $ 16,000 for income taxes during 2021.
5. On December 31. 2021 the following adjustments were completed:
Service revenue earned but not yet collected in cash $ 22,500
Accrued Interest expense $ 4,500
Accrued Salaries expense $ 7,200
Mayer has a 20% income tax rate.
Instructions
Prepare an income statement and record the adjustment to income taxes.

Question

Quizplus · Accepted Answer

The Answer of Sawyer Corporation, a private company reporting under ASPE has the following information available with respect to the company's operations until December 31, 2021:
1. Collected $ 345,000 cash for service revenue earned.
2. Paid $ 125,000 salaries expense, $ 56,000 rent expense, and $ 5,000 insurance expense.
3. Purchased a new vehicle for $ 35,000 cash on January 1, 2021. This vehicle will be depreciated over 5 years with no salvage value.
4. Accrued $ 16,000 for income taxes during 2021.
5. On December 31. 2021 the following adjustments were completed:
Service revenue earned but not yet collected in cash $ 22,500
Accrued Interest expense $ 4,500
Accrued Salaries expense $ 7,200
Mayer has a 20% income tax rate.
Instructions
Prepare an income statement and record the adjustment to income taxes.

Sawyer Corporation, a Private Company Reporting Under ASPE Has the Following