Question

The Cheyenne Company accumulates the following adjustment data at December 31 Styles 1. Revenue of $1,232 collected in advance has been recognized. 2. Salaries of $600 are unpaid. 3. Prepaid rent totaling $368 has expired 4. Supplies of $484 have been used 5. Revenue recognized but unbilled totals $720. 6. Utility expenses of $336 are unpaid. 7. Interest of $220 has accrued on a note payable. For each of the above items indicate: The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or 1. accrued expense). 2. The account relationship (asset/liability, liability/revenue, etc.). 3. The status of account balances before adjustment (understatement or overstatement). Focus

4. the adjusting Entry. prepare your answer in Tabular form.

Answer 1

Adjusting Entries

Type of

Account

Status before

Events

Particulars

Debit

Credit

adjustment

Relationship

adjustment

1)

Unearned Revenue

$ 1,232.00

Unearned Revenue

Liability / Revenue

Overstatement

To Earned Revenue

$ 1,232.00

2)

Salaries Expense

$    600.00

Accrued Expense

Liability / Expense

Understatement

To Salaries Payable

$    600.00

3)

Rent Expense

$    368.00

Prepaid Expense

Asset / Expense

Overstatement

To Prepaid Rent

$    368.00

4)

Supplies Expense

$    484.00

Accrued Expense

Asset / Expense

Overstatement

To Supplies

$    484.00

5)

Accounts Receivable

$    720.00

Accrued Revenue

Asset / Revenue

Understatement

To Earned Revenue

$    720.00

6)

Utility Expense

$    336.00

Accrued Expense

Liability / Expense

Understatement

To Bills Payable

$    336.00

7)

Interest Expense

$    220.00

Accrued Expense

Liability / Expense

Understatement

To Interest Payable

$    220.00

Is this okay?