Selected account balances before adjustment for Alantic Coast Realty at July 31,
ID: 2609772 • 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 $73,600 Equipment 346,600 Accumulated Depreciation—Equipment $107,000 Prepaid Rent 8,550 Supplies 3,090 Wages Payable – Unearned Fees 11,000 Fees Earned 672,400 Wages Expense 337,500 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 10250 Fees earned 10250 (To record unbilled fees) b. Jul. 31 Supplies expense ($3090 - $710) 2380 Supplies 2380 (To record supplies expense) c. Jul. 31 Rent expense 5700 Prepaid rent 5700 (To record rent expired) d. Jul. 31 Depreciation expense 9500 Accumulated depreciation-office equipment 9500 (To record depreciation expense) e. Jul. 31 Unearned fees 8660 Fees earned ($11000 - $2340) 8660 (To record fees earned) f. Jul. 31 Wages expense 4700 Wages payable 4700 (To record accrued wages)Related Questions
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