Question

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 suppiles account balance on March 31 is $5,635, the supplies on hand on March 31 are $1,495. • The unearned rent account balance on March 31 is 84,800 representing the receipt of an advance payment on March 1 of four months' rent from tenants, • Wages accrued but not paid at March 31 aro $2,035. • Fees accrued but unbilled at March 31 are $15,450 • Depreciation of office equipment is 84,420 Required: 1. Journalize the adjusting entries required ar March 31. Refer to the Chart of Accounts for exact wording of account bles. 2. What is the difference between adjusting entries and correcting entries?

Answer 1

1. Adjusting Entries -

Potomac Realty Adjusting Entries Date Accounts Title Debit Credit Assets Liabilities Equity Mar 31 Supplies Expense $ 4,140 $ (4,140) Supplies $ 4,140 $ (4,140) (Being Supplies utilised) $ (1,150) Mar 31 Unearned Rent $ 1,150 Rent Revenue (Being rent revenue earned) $ 1,150 $ 1,150 $ (2,035) Mar 31 Wages Expense $ 2,035 Wages Payable $ 2,035 (Being Wages Expense incurred and accrued) $ 2,035 Mar 31 $ 15,450 Accounts Receivable $ 15,450 Fees Earned (Being Fees earned and billed) $ 15,450 $ 15,450 $ (4,420) Mar 31 Depreciation Expense $ 4,420 Accumulated Depreciaton (Being Depreciation expense incurred) Total $ 4,420 $ 4,420 $ 11,310 $ 5,305 $ 6,005

2. Difference between adjusting entries and correcting entries -

Answer -

Adjusting Entries are a planned part of the accounting process, Correcting Entries are not planeed but arise when necessary to correct errors.