Determine the proper amount of net income

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Reference no: EM13884003

1.During the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2015, you come across several items needing further consideration. Currently, net income is $78,400.

a. An insurance policy covering 12 months was purchased on October 1, 2015, for $19,200. The entire amount was debited to prepaid insurance and no adjusting entry was made for this item in 2015.
b. During 2015, the company received a $4,700 cash advance from a customer for services to be performed in 2016. The $4,700 was incorrectly credited to service revenue.
c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $1,700 were on hand at December 31, 2015.
d. Trojan borrowed $50,000 from a local bank on September 1, 2015. Principal and interest at 12% will be paid on August 31, 2016. No accrual was made for interest in 2015.

Required:
Using the information in a through d above, determine the proper amount of net income as of December 31, 2015.

Reference no: EM13884003

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