Homework for Accounting
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homework_-_accounting_problem.docxHomework – Accounting
Problem 11-5B
Check figure: $492,363
Jorha Company’s condensed income statement for the year ended November 30, 2014 is shown below:
Jorha Company
Income Statement
For the Year Ended November 30, 2014
Fees Earned $863,500
Operating Expenses $512,800
Net Income total $350,700
The Liabilities reported on the November 30, 2014, Balance Sheet were:
Accounts Payable $26,230
Mortgage Payable 328,698
Total Liabilities $354,928
Louis Jorha, the owner, is looking for additional financing. A potential lender has reviewed Jorha’s accounting records and discovered the following:
a) Mortgage payments are made annually each December 1. The December 1, 2014, payment has not yet been made on recorded. A partial amortization schedule for the mortgage follows:
|
Year |
Payment |
Interest |
Principal |
Principal Balance December 1 |
|
2013 |
$46,244 |
$17,854 |
$28,390 |
$328,698 |
|
2014 |
46,244 |
16,435 |
29,809 |
298,889 |
|
2015 |
46,244 |
14,944 |
31,300 |
267,589 |
|
2016 |
46,244 |
13,379 |
32,865 |
234,724 |
b) Fees earned included $85,000 received for work to be done in January and February 2015.
c) Accrued salaries at November 30, 2014, totalling $11,500 have not been recorded.
d) $7,000 of office supplies purchased on account were received November 28, this transaction was not recorded.
e) Annual property taxes of $17,500 are due each December 1, no property taxes have been included on the income statement.
Required:
Using the information provided, prepared a corrected Income Statement and Liabilities section of the Balance Sheet.
Analysis Component:
If you were paid an annual bonus based on net income, what ethical dilemma would you face regarding to above items?
