Question

Before month-end adjustments are made, the February 28 trialbalance of Bose's Enterprise contains revenue of $11,000 andexpenses of $7,600. Adjustments are necessary for the followingitems:A. Depreciation for February is $1,200.B. Revenue earned but not yet billed is $2,800.C. Accrued interest expense is $800.D. Revenue collected in advance that is now earned is $2,500.E. Portion of prepaid insurance expired during February is$500.Calculate the correct net income for Bose's Enterprise forFebruary 3.

Answer 1

$2,800

Step-by-step explanation:

REVENUE

Revenue $11,000

Add:

B. Revenue earned but not yet billed = $2,800

D. Unearned revenue noe earned = $2,500 $5,300

Total Adjusted Revenue $16,300

EXPENSES

Expenses $11,000

Add:

A. Depreciation for February = $1,200.

C. Accrued interest expense = $800

E. Prepaid insurance = $500 $2,500

Total Adjusted expenses $13,500

Correct net income = Total Adjusted Revenue - Total Adjusted expenses

= $16,300 - $13,500

= $2,800