Question :
188. Complete the missing items in the following chart:
Prepaid Expenses
Examples
: 1239714
188. 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)
189. Income statements for Debra’s Design Services are shown below.
Debra’s Design ServicesIncome StatementsFor the Years Ended December 31, 2012 and 2011
Fees earned
$765,340
$696,520
Operating expenses:
Wages expense
$254,000
$214,600
Rent expense
120,000
108,000
Supplies expense
76,500
98,715
Miscellaneous expense
_ 11,680
16,420
Total operating expenses
$462,180
$437,735
Net income
$303,160
$258,785
(a) Prepare a vertical analysis of Debra’s Design Services income statements.(b) Does the analysis indicate favorable or unfavorable trend(s)?(c) What other information would enhance the analysis?
190. Two income statements for Galaxy Services are shown below:
Galaxy ServicesIncome StatementsFor the Years Ended December 31, 2012 and 2011
Fees earned
$688,806
$766,172
Operating expenses:
Wages expense
288,806
236,060
Rent expense
108,000
118,800
Supplies expense
68,850
108,587
Miscellaneous expense
__10,512
18,062
Total operating expenses
$415,962
$481,509
Net income
$272,844
$284,663
(a) Prepare a vertical analysis of Galaxy Services income statements.(b) What type of trend(s) are indicated: favorable or unfavorable trend?(c) What other information would enhance the analysis?
191. A business pays bi-weekly salaries of $20,000 every other Friday for a ten-day period ending on that day. The last pay day of December is Friday, December 27. Assuming the next pay period begins on Monday, December 30, journalize the adjusting entry necessary at the end of the fiscal period (December 31).
Date
Description
Post Ref
Debit
Credit
