Question

Answer all questions please.

Selected account balances before adjustment for Intuit Realty at November 30, the end of the current year, follow:

	Debits		Credits
Accounts Receivable	$76,540
Equipment	118,000
Accumulated Depreciation - Equipment			$11,790
Prepaid Rent	9,600
Supplies	2,300
Wages Payable			_
Unearned Fees			10,560
Fees Earned			446,990
Wages Expense	150,780
Rent Expense	_
Depreciation Expense	_
Supplies Expense	_

Data needed for year-end adjustments are as follows:

Required:

• Supplies on hand at November 30, $690.
• Depreciation of equipment during year, $1,150.
• Rent expired during year, $7,040.
• Wages accrued but not paid at November 30, $2,220.
• Unearned fees at November 30, $4,440.
• Unbilled fees at November 30, $5,280.

1. Journalize the six adjusting entries required at November 30, based on the data presented.

Nov. 30
30
30
30
30
30

2- What would be the effect on the income statement if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year? Enter all amounts as positive numbers.

Fees earned

by $

Depreciation expense

by $

Net income

by $

What would be the effect on the balance sheet if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year? Enter all amounts as positive numbers.

Accumulated depreciation		by $
Total assets		by $
Unearned fees		by $
Total liabilities		by $
Owner's equity		by $
Total liabilities and owner's equity		by $

Answer 1

Answer-

Journal Entry
Date	Particulars	Debit	Credit
Nov.30	Supplies Expense	1,610		$2,300 - $690
	Supplies		1,610
	(Record the supplies used)
Nov.30	Depreciation Expense	1,150
	Accumulated Depreciation - Equipment		1,150
	(record the depreciation on equipment)
Nov.30	Rent Expenses	7,040
	Prepaid Rent		7,040
	(Record the rent expenses)
Nov.30	Wages Expenses	2,220
	Wages Payable		2,220
	(record the wages due)
Nov.30	Unearned Fees	6,120		$10,560 - $4,440
	Fees Earned		6,120
	(record the fees earned)
Nov.30	Accounts Receivable	5,280
	Fees Earned		5,280
	(record the fees earned)

2-

		Amount
Fees Earned	Understated	by $6,120
Depreciation Expenses	Understated	by $1,150
Net Income	Understated	by $4,970

3-

Accumulated Depreciation	Understated	by $1,150
Total Assets	Overstated	by $1,150
Unearned Fees	Overstated	by $6,120
Total Liabilities	Overstated	by $6,120
Owners'Equity	Understated	by $4,970
Total Liabilities & Owners' Equity	Overstated	by $1,150

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