Question

Be careful--files from the Internet can contain viruses. Unless you need to edit it's safer to stay in Protected View. A5 Enable Editing { B D E G H K 6 . C С 1 Accounting Adjustments 2 Practice Quiz 3 4 The following are selected balances before adjustment at December 31, 2018: 5 Debit Credit 7 8 A/R $ 75,000 9 Equipment 250,000 10 Accumulated Depreciation- 11 Equipment $ 12,000 12 Prepaid Rent 12,000 13 Supplies 3,170 14 Wages Payable 15 Unearned Fees 10,000 16 Fees Earned 400,000 17 Wage Expense 140,000 18 Rent Expenes 19 Supplies Expense 20 Depreciation Expense 21 22 Journalize the year end adjustments using the information below: 23 24 1. Supplies on hand at December 31, $550. 25 2. The equipment has a useful life of 10 years and is depreciated on a straight- 26 line basis with no residual value. 27 3. Twelve months of rent was prepaid on July 1. 28 4. Wages are paid weelky on Friday. Wages to be paid on January 2 are $2,500 29 for the 5-day workweek. 30 5. Of the unearned fees, 65% was earned as of December 31. 31 6. Unbilled fees for services performed as of December 31 were $7,200. 32 33 A. What was the net effect on Net Income of the above adjustments? 34 B. Assume adjustment #3 above was omitted. What is the effect on Assets, Liabilities, 35 Stockholder's Equity, Revenue and Expense? 36 37 28

Answer 1

Journal Particulars late Debit 2620 2620 25000 25000 6000 + Supplies Expennae Aldo To supplice Ala 2) epiciation Expesado Ale. ubi To accumulated adipiscializu 3) Readexpense. Alcalde To Prepaid Rent Al 4) Wagoa. Expessze Alda wages layable 5) Unearned fels Ale. Olc. To fees farmed Al. 6ooo 1500 Aler 1500 6500 6500 7200 6) accants Recewable Allo To fees Earned All . 7200

A Met baconsellers Adjustments Rellenue feed farned 400000 Less: Expenses wages Expense 1 40.000 Net Income 2, 60,000 413700 met luceme After Adjustment Revenue feas parned stoo (400000 +6500+7200) Liss: Expenses wage Expessa 141500 25000 depiliatem spustio 6000 .2620 Supplies' Expensare Total Expensa net Income Raut Expense 175/20 238580 We can conclude that the met Tucome falls leyf 21426 (260000 - 238580 the above odpustimista o) after

B.) If we assume that the transaction number 3 have been omitted then the assets side will increase by $6000, expenses will decrease by $6000 and shareholders equity will increase by $6000. But the revenue and liabilities side will remain unaffected.

As the amount of prepaid rent will remain same that is $12000 .