P3-34A Journalizing adjusting entries and identifying the impact on financial st

Question

P3-34A Journalizing adjusting entries and identifying the impact on financial

statements

Griffin Fishing Charters has collected the following data for the December 31 adjusting entries:

A. The company received its electric bill on December 31 for $375 but will not pay it until January 5. (Use the Utilities Payable account.)

Requirements

1. JournalizetheadjustingentriesneededonDecember31forGriffinFishing Charters. Assume Griffin records adjusting entries only at the end of the year.

2.If Griffin had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understated. Use the following table as a guide.

Adjusting Entry Specific Category of Accounts on the Balance Sheet Over Understated Income Statement Understated Specific Category of Accounts on the Over

Explanation / Answer

1. Adjusting entry :

2.If Griffin had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understated.

Date accounts & explanation debit credit Dec 31 Utilities expenses 375 Utilities payable 375 (To record adjusting entry)

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