Question

Adjusting Entries and Errors At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker Jacobs, an attorney: Net income for August $167,300 Total assets at August 31 917,000 Total liabilities at August 31 303,000 Total owner's equity at August 31 614,000 In preparing the financial statements, adjustments for the following data were overlooked: • Unbilled fees earned at August 31, $7,040. • Depreciation of equipment for August, $3,200. • Accrued wages at August 31, $2,250. Supplies used during August, $1,970. Required: 1. Journalize the entries to record the omitted adjustments. Aug. 31 31 31

Answer 1

Requirement 1:

Date	Account title and explanation	Debit	Credit
Aug 31	Accounts receivable	$7,040
	Fees earned		$7,040
	[To record accrued revenue]
Aug 31	Depreciation expense	$3,200
	Accumulated depreciation-equipment		$3,200
	[To record depreciation expense]
Aug 31	Wages expense	$2,250
	Wages payable		$2,250
	[To record accrued wages]
Aug 31	Supplies expense	$1,970
	Supplies		$1,970
	[To record supplies expense]

Requirement 2:

	Net income		Total assets	=	Total liabilities	+	Total Owner's Equity
Reported amounts	$167,300		$917,000		$303,000		$614,000
Corrections:
Unbilled fees earned	+7,040		+7,040				+7,040
Equipment depreciation	-3,200		-3,200				-3,200
Accrued wages	-2,250				2,250		-2,250
Supplies used	-1,970		-1,970				-1,970
Corrected amount	$166,920		$918,870		$305,250		$613,620