Harriet Kasun, Capita Interest Expense Interest Receivable Land Office Equipment

Question

Harriet Kasun, Capita Interest Expense Interest Receivable Land Office Equipment Prepaid Rent Supplies Unearned Fees Wages Expense OB).2 EX 3-3 Adjusting entry for accrued fees 081.2 t the end of the current year, $59,500 of fees have been earned but have not been billed to clients. a. Journalize the adjusting entry to record the accrued fees b. If the cash basis rather than the accrual basis had been used, would an ad justing entry have been necessary? Explain. OBJ.2, EX 3-4 Effect of omitting adjusting entry The adjusting entry for accrued fees was omitted at the end of the current year. Indicate which items will be in error, because of the omission, on (a) the income statement for the current year and (b) the balance sheet at the end of the year. Also indicate whether the items in error will be overstated or understated. OBI.2 EX 3-5 Adjusting entries for accrued salaries entry: Garcia Realty Co. pays weekly salaries of $17,250 on Friday for a five-day workweek ending on that day. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends (a) on Wednesday and (b) on Thursday. EX 3-6 Determining wages paid The wages payable and wages expense accounts at May 31, after adjusting entries have been posted at the end of the first month of operations, are shown in the following T accounts: OBJ. 2 Wages Expense 73,250 Bal. 7,175 Bal. Determine the amount of wages paid during the month. EX 3-7 Effect of omitting adjusting entry Accrued salaries owed to employees for October 30 and 31 are not considered in prepa ing the financial statements for the year ended October 31. Indicate which items will erroneously stated, because of the error, on (a) the income statement for the year and the balance sheet as of October 31. Also indicate whether the items in error will be ov stated or understated

Explanation / Answer

3.3)unbilled revenue(db)9500
Revenue(Cr)9500
b)no there is no need of adjsuting basis required since if it is cash basis we would not have passed any entry for this

3.5)a)wednesday means 3 days salary accrued=3*(17250/5)=10350
salaries expense(cdb)10350
salaries payable(cr)10350
b)thursday means 4 days salary accrued=4*(17250/5)=13800
salaries expense(cdb)13800
salaries payable(cr)13800

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