Question : 181. Complete the missing items in the following chart: Prepaid Expenses Examples : 1227133

 

181. Complete the missing items in the following chart:

Prepaid Expenses

Examples

Adjusting Entry

Financial Statement Impact if Adjusting Entry is Omitted

Supplies,(a)

Dr. Expense   Cr. Asset

Income Statement:   Revenues: No effect   Expenses: Understated   Net income:  (b)Balance Sheet:   Assets:       (c)   Liabilities:   (d)   Stockholders’ equity:  Overstated

Unearned Revenues

Examples

Adjusting Entry

Financial Statement Impact if Adjusting Entry is Omitted

Unearned rent,(e)

(f)

Income Statement:   Revenues: (g)   Expenses: No effect   Net income:  (h)Balance Sheet:   Assets:       (i)   Liabilities:   Overstated   Stockholders’ equity:  (j)

Accrued Revenues

Examples

Adjusting Entry

Financial Statement Impact if Adjusting Entry is Omitted

Interest income due on a note,(k)

Dr. Asset   Cr. Revenue

Income Statement:   Revenues: (l)   Expenses: (m)   Net income:  UnderstatedBalance Sheet:   Assets:       (n)   Liabilities:   (o)   Stockholders’ equity:  Understated

Accrued Expenses

Examples

Adjusting Entry

Financial Statement Impact if Adjusting Entry is Omitted

Interest due on a notes payable, (p)

(q)

Income Statement:   Revenues: No effect   Expenses: (r)   Net income:  (s)Balance Sheet:   Assets:       (t)   Liabilities:   Understated   Stockholders’ equity:  (u)

 

 

 

 

 

 

182. On April 30, a business estimates depreciation on equipment used during the first year of operations to be $2,900. (a) Journalize the adjusting entry required as of April 30.  (b) If the adjusting entry in (a) were omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of April 30? 

 

 

183. Journalize the six entries to adjust the accounts at December 31.  (Hint: One of the accounts was affected by two different adjusting entries). 

 

UnadjustedTrial Balance

AdjustedTrial Balance

 

Debit Balances

Credit Balances

Debit Balances

Credit Balances

Cash

5,000

 

5,000

 

Accounts Receivable

32,000

 

32,600

 

Supplies

3,600

 

100

 

Prepaid Insurance

4,000

 

1,400

 

Equipment

11,000

 

11,000

 

Accumulated Depreciation

 

 

 

1,700

Wages Payable

 

 

 

2,000

Unearned Fees

 

8,900

 

3,500

Capital Stock

 

10,000

 

10,000

Retained Earnings

 

12,000

 

12,000

Fees Earned

 

69,000

 

75,000

Wages Expense

44,300

 

46,300

 

Supplies Expense

 

 

3,500

 

Insurance Expense

 

 

2,600

 

Depreciation Expense

          

         

  1,700

          

Total

99,900

99,900

104,200

104,200