Question

E3-28 (similar to) The following data at July 31, 2018, are given for JBE: (Click the icon to view the data.) Read the requirements. Requirement 1. Journalize the adjusting entries needed on July 31, 2018. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) a. Depreciation, $400. Date Accounts and Explanation Debit Credit (a) Jul. 31 i More Info i Requirements a. Depreciation, $400. b. Prepaid rent expires, $700. c. Interest expense accrued, $600. d. Employee salaries owed for Monday through Thursday of a five-day workweek; weekly payroll, $16,000. e. Unearned revenue earned, $1,400. Office supplies used, $450. 1. Journalize the adjusting entries needed on July 31, 2018. 2. Suppose the adjustments made in Requirement 1 were not made. Compute the overall overstatement or understatement of net income as a result of the omission of these adjustments. Print Done

Answer 1

Adjusting entry

No	General Journal	Debit	Credit
a	Depreciation expense	400
	Accumulated depreciation		400
b	Rent expense	700
	Prepaid rent		700
c	Interest expense	600
	Interest payable		600
d	Salaries expense (16000/5*4)	12800
	Salaries payable		12800
e	Unearned revenue	1400
	Revenue earned		1400
f	Supplies expense	450
	Supplies		450

2) Total expense = 400+700+600+12800+450 = 14950

Overstatement of net income = 14950-1400 = 13550