Question

Instructions Chart of Accounts Journal Final Question Instructions On March 31, the following data were accumulated to assist the accountant in preparing the adjusting entries for Potomac Realty: • The supplies account balance on March 31 is $5,620, the supplies on hand on March 31 are $1,290. • The unearned rent account balance on March 31 is $5,000 representing the receipt of an advance payment on March 1 of four months' rent from tenants. • Wages accrued but not paid at March 31 are $2,290. • Fees accrued but unbilled at March 31 are $16,825. • Depreciation of office equipment is $4,600. Required: 1. Journalize the adjusting entries required at March 31. Refer to the Chart of Accounts for exact wording of account titles. 2. What is the difference between adjusting entries and correcting entries?

Answer 1

1) Journal entry

	Date	account titles	Post ref	Debit	Credit	Assets	Liabilities	Stockholder's equity
1	Mar 31	Supplies expense (5620-1290)		4330				-4330
		Supplies			4330	-4330
2	Mar 31	Unearned rent (5000/4)		1250			-1250
		Rent revenue			1250			1250
3	Mar 31	Wages expense		2290				-2290
		Wages payable			2290		2290
4	Mar 31	Account receivable		16825		16825
		Fees earned			16825			16825
5	Mar 31	Depreciation expense		4600				-4600
		Accumulated depreciation-equipment			4600	-4600

b) Adjusting entries are planned part of accounting process but correcting entries are not planned but arise when necessary to correct errors.