please make sure complete all the parts of the questions Adjusting Entries Selec

Question

please make sure complete all the parts of the questions

Adjusting Entries

Selected account balances before adjustment for Intuit Realty at November 30, the end of the current year, follow:

Data needed for year-end adjustments are as follows:

Required:

Supplies on hand at November 30, $600.

Depreciation of equipment during year, $1,000.

Rent expired during year, $6,160.

Wages accrued but not paid at November 30, $1,940.

Unearned fees at November 30, $3,880.

Unbilled fees at November 30, $4,620.

1. Journalize the six adjusting entries required at November 30, based on the data presented.

2. What would be the effect on the income statement if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year? Enter all amounts as positive numbers.

3. What would be the effect on the balance sheet if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year? Enter all amounts as positive numbers.

4. What would be the effect on the “Net increase or decrease in cash” on the statement of cash flows if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year?

Debits Credits Accounts Receivable $66,980 Equipment 103,000 Accumulated Depreciation - Equipment $10,310 Prepaid Rent 8,400 Supplies 2,010 Wages Payable _ Unearned Fees 9,240 Fees Earned 391,160 Wages Expense 131,950 Rent Expense _ Depreciation Expense _ Supplies Expense _

Explanation / Answer

1

1

date dr ($) cr ($) Nov-30 supplies expense 1410 2010-600= 1410 supplies 1410 Nov-30 Depreciation expense 1000 Accumulated Depreciation 1000 Nov-30 rent expense 6160 prepaid rent 6160 Nov-30 wages expense 1940 wages payable 1940 Nov-30 unearned fees 5360 9240-3880= 5360 Fees earned 5360 Nov-30 accounts receivable 4620 Fees earned 4620 2 fees earned 5360 (understated) depreciation exp 1000 (understated) net income by 4360 net income understated by $4360 3 Accumulated Depreciation by 1000 (understated) total assets by 1000 net assets = assets at historical cost - accumulated depeciation overstated unearned fees by 5360 (overstated) total liabilities by 5360 (overstated) owners equity 4360 net income is added to retained earnings which is part of owners equity understated total liabilities and owners equity by 1000 total assets=total liabilities + owners equity overstated 4 Both will have no effect on net cash increase or decrease since they are adjustment enries cash is not affected

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