141.
Primo Landscaping commenced its business on January 1, 2014. On December 31, 2014, Primo Landscaping did not record any adjusting entries with respect to the following transactions:
a. During the first year of its operations, Primo purchased supplies in the amount of $10,000 (debited to “Supplies expense”), and of this amount, $3,000 were unused as of December 31, 2014.
b. On March 15, 2014 Primo received $18,000 for landscape maintenance services to be rendered for 24 months (beginning July 1, 2014). This amount was credited to “Landscaping revenue.”
c. The company’s fuel bill for $1,500 for the month of December 2014 was not received until January 15, 2015.
d. The company borrowed $100,000 from First Bank on April 1, 2014 at an interest rate of 12% per year. The principal, along with all of the interest, is due on March 30, 2015.
e. On January 17, 2014 the company purchased a backhoe for $65,000. The backhoe is expected to last for 10,000 hours and have no salvage value. During 2014, Primo operated the backhoe for 500 hours.
Required:
Complete the table below, showing the effect of the omission of each year-end adjusting entry on assets, liabilities, and net income. Use “OS” for overstated, “US” for understated, and “NE” for no effect.
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