Selected account balances before adjustment for Alantic Coast Realty at July 31,
ID: 2609769 • Letter: S
Question
Selected account balances before adjustment for Alantic Coast Realty at July 31, 2016, the end of the current year, are as follows:
Debits
Credits
Data needed for year-end adjustments are as follows:
The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.
none
X
Chart of Accounts
none
X
Journal
1. Journalize the six adjusting entries required at July 31, based on the data presented. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
1
Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13
Solution
1
Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13
Points:
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Explanation
none
X
Final Questions
2. What would be the effect on the income statement if adjustments (a) and (f) were omitted at the end of the year?
Over/Understated
Amount
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Points:
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Explanation
3. What would be the effect on the balance sheet if adjustments (a) and (f) were omitted at the end of the year?
Over/Understated
Amount
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Points:
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Explanation
4. What would be the effect on the “Net increase or decrease in cash” on the statement of cash flows if adjustments (a) and (f) were omitted at the end of the year? selector 1
Understated
Overstated
No effect
Points:
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Explanation
Debits
Credits
Accounts Receivable $ 75,000 Equipment 345,700 Accumulated Depreciation—Equipment $112,500 Prepaid Rent 9,000 Supplies 3,350 Wages Payable – Unearned Fees 12,000 Fees Earned 660,000 Wages Expense 325,000 Rent Expense – Depreciation Expense – Supplies Expense –Explanation / Answer
2.
3.
4. No effect
Since no cash is involved.
1 Date Description Debit Credit a. Jul. 31 Accounts receivable 11150 Fees earned 11150 (To record unbilled fees) b. Jul. 31 Supplies expense ($3350 - $900) 2450 Supplies 2450 (To record supplies expense) c. Jul. 31 Rent expense 6000 Prepaid rent 6000 (To record rent expired) d. Jul. 31 Depreciation expense 8950 Accumulated depreciation-office equipment 8950 (To record depreciation expense) e. Jul. 31 Unearned fees 10000 Fees earned ($12000 - $2000) 10000 (To record fees earned) f. Jul. 31 Wages expense 4840 Wages payable 4840 (To record accrued wages)Related Questions
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