On May 31, the following data were accumulated to assist the accountant in prepa
ID: 2333353 • Letter: O
Question
On May 31, the following data were accumulated to assist the accountant in preparing the adjusting entries for Dependable Realty a. Fees accrued but unbilled at May 31 are $14,720. b. The supplies account balance on May 31 is $4,840. The supplies on hand at May 31 are $1,380. c. Wages accrued but not paid at May 31 are $1,850. d. The unearned rent account balance at May 31 is $14,430, representing the receipt of an advance payment on May 1 of three months' rent from tenants. e. Depreciation of office equipment is $2,460. Required: Journalize the adjusting entries required at May 31. Oct. 31 31 31Explanation / Answer
Adjusting Entries
Date
General Journal
Debit
Credit
31-May
Accounts Receivable
$ 14,720.00
Service Revenue
$ 14,720.00
31-May
Supplies Expense
$ 3,460.00
Supplies
$ 3,460.00
31-May
Wages Expense
$ 1,850.00
Wages payable
$ 1,850.00
31-May
Unearned Rent revenue
$ 4,810.00
Rent Revenue
$ 4,810.00
31-May
Depreciation Expense -Office equipment
$ 2,460.00
Accumulated Depreciation -Office equipment
$ 2,460.00
Notes
Part 2
What is the difference between adjusting entries and correcting entries?
Answer ---(b) Adjusting entries are planned part of accounting process, correcting entries are not planned but arise when necessary to correct errors.
Explanation
Adjustment entries are planned because we know in advance what amount of adjustments needs to be done, such as recording of depreciation, earning of revenue, expiration of insurance term etc. Nobody is aware of Correction entries in advance so they cannot be planned.
Adjusting Entries
Date
General Journal
Debit
Credit
31-May
Accounts Receivable
$ 14,720.00
Service Revenue
$ 14,720.00
31-May
Supplies Expense
$ 3,460.00
Supplies
$ 3,460.00
31-May
Wages Expense
$ 1,850.00
Wages payable
$ 1,850.00
31-May
Unearned Rent revenue
$ 4,810.00
Rent Revenue
$ 4,810.00
31-May
Depreciation Expense -Office equipment
$ 2,460.00
Accumulated Depreciation -Office equipment
$ 2,460.00
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