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tax rates for corporations can be changed by an act of congress

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the adjustment for federal income tax payable and federal income tax expense is determined only after all other adjusting entries are posted and the net income before federal income tax is determined

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The annual straight line depreciation of equipment costing 4000 with a salvage value of 500 and a useful life of 5 years would be 700

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functional depreciation occurs when a plant asset becomes inadequate or obsolete

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The adjusting entry for accrued revenue is increases a revenue account and a recieveable account

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The adjustment for the supplies - office account is will result in a debit to supplies expense

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the amount of the adjustment for prepaid insurance represents the values of the insurance premium used during the fiscal period

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Rather than a work sheet a business can use an unadjusted trail balance and record adjustment directly to a general journal

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A trial balance provides a complete list of accounts that may need to be brought up to date

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Te first step in preparing adjusting entries is to prepare and adjusted trail balance

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The adjusting entry for Merchandise inventory is unique to a merchandising business

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Net income before federal tax - over= net income subject to tax x tax rate= marginal tax

Bracket minimum income tax + Marginal income tax= federal income tax

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15-3

1. Journalize the adjusting entries for accumulated depreciation. (There will be two entries… one for office equipment and one for store equipment.)

15-4

1. Post the adjusting entries to the general ledger.

2. Record all account balances, except for Federal Income Tax Expense, on the adjusted  trial balance.

3. Using the tax table (and calculation outline provided), calculate the federal income tax owed for the fiscal year.

4. Journalize and post the adjusting entry for federal income tax payable.

5. Complete the adjusted trial balance (fill in the amounts for Federal Income Tax Payable and Federal Income Tax Expense).

6. Total, prove and rule the adjusted trial balance.

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1. Total, prove and rule the Unadjusted Trial Balance

2. Journalize the adjusting entries for Supplies and Prepaid Insurance.

3. Journalize the adjusting entries for Merchandise Inventory and Interest Receivable.