Question

On December 31, 2019, Krug Company prepared adjusting entries that included the following items: Depreciation expense:...

On December 31, 2019, Krug Company prepared adjusting entries that included the following items:

Depreciation expense: $36,000.

Accrued sales revenue: $34,000.

Accrued expenses: $18,000.

Used insurance: $8,000; the insurance was initially recorded as prepaid.

Rent revenue earned: $6,000; the rent was initially prepaid by the tenant and credited to unearned rent revenue.

If Krug Company reported total assets of $340,000 prior to the adjusting entries, how much are Krug's total assets after the adjusting entries?

Homework Answers

Answer #1
Total assets prior adjustments $   340,000
Less: Depreciation expense $   (36,000) Will increase accumulated depreciation and it will result to decrease in Fixed assets
Add: Accrued sales revenue $     34,000 Will increase accounts receivable
Less: Insurance $     (8,000) Will decrease prepaid insurance
Total assets after adjustments $   330,000

Accrued expenses and rent revenue earned will make impact on total liabilities

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