Question

For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income.  If an adjustment caused net income to decrease, enter the amount as a negative value.  Net income before adjustments can be found on the income statement tab.  (Hint:  Select unadjusted on the drop-down.)

 

 I tried to inset the files for the income statement and balance sheet, but I  fail. Would you be able to explain how to get the "impact on net income" box with the limited information provided?

Answer 1

                                    Statement relating to affecting of income statement and balance sheet

Adjusting entries related to                account affecting the                                     Impact on net income

                                                    Income statement       Balance sheet

a) Rent     (prepaid) yes                   no impact

b) Insurance (prepaid)                                                              yes                                    no impact

c) Office supplies                                                   

d) Depreciation                                   yes                                                                      reduces income

e) Unbilled Fees                                                                     yes                                 

f) Unpaid wages                                                                      yes

journal entries for the above given transactions

date                particulars                                                      debit $                          credit $

apr1               cash a/c                                                         80000

                     equipment a/c                                                  26000

                              to common stock a/c                                                                 106000

apr2              Prepaid expence a/c                                          9000

                             to cash a/c                                                                                   9000

apr3              puchases a/c    8000

                    office supplies a/c                                              3600

                             to account payable a/c                                                                  11600

apr6              cash a/c                                                           4000

                           to services a/c                                                                                 4000

apr9              account recievable a/c                                       6000           

                           to client a/c                                                                                      6000

apr13            account payable a/c                                          11600

                           to cash A/c                                                                                      11600

apr19            prepaid expence a/c                                          2400

                           to cash a/c                                                                                       2400

apr22            cash a/c                                                           4400

                          to account recievable a/c                                                                     4400

apr25            account recievable a/c                                        2890

                          to client a/c                                                                                        2890

apr28            dividend a/c                                                        5500

                          to cash a/c                                                                                         5500

apr29            office supplies a/c                                               600

                          to account payable a/c 600

apr30    utility bill a/c 435

to cash a/c    435