Question

3. REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available. Accounts Unadjusted Adjusted Trial Balance Trial Balance Debit Credit Debit Credit Cash 13,000 13,000 Accounts Receivable 1,500 1,800 Prepaid Insurance 600 200 Supplies 3,800 3,000 Machines 30,000 30,000 Accumulated Depreciation 12,000 17,500 Wages Payable 900 Unearned Fees 6,700 6,500 Owner's Capital 24,000 24,000 Owner's Drawing 4,800 4,800 Fees Earned 25,000 25,500 Wages Expense 14,000 14,900 Depreciation Expense 5,500 Supplies Expense 800 Insurance Expense 400 67.700 67.700 74,400 74.400 a) Reconstruct the adjusting entries and give a brief explanation of each. b) What is the amount of net income?

Answer 1

Adjusting centres Transaction No Account and Tiles Debit Credit Account Recivable 300 300 fees Earned (Untilled Services to be recorded) Insurance Expenses 22 900 800 800 + Prepaid I murance ( Expired prepaid insurance being corded) Supplies Expenses Sopplies ( Sopplies Bed Used being recorded) Depreciatim Expensy Accumulated Depreciatim ( Deprec'ation expenses being recorded) Wages expenses Wages Payable ( Unpaid wage recorded ) 550 52 900 gou

0 Uneorned fees 200 fees Earned 900 ( Earned part of onearmed fees recorded) 6) Calculation of Net Income Revenuela fees Earned 25,500 Lels: Expenses 14900 5500 Wages expense Depreciation a penis Supplies expense І I nsurance Expense 800 400 Total expenses (21600 Net Income $ 3, 900