Adjusting entries Obj. 2, 3, 4, 5 Selected account balances before adjustment for Atlantic Coast Realty at July 31, the end of the current year, are as follows:

Debits Credits Accounts Receivable $ 75,000 Equipment 345,700 Accumulated Depreciation—Equipment $112,500 Prepaid Rent 9,000 Supplies 3,350 Wages Payable —

Unearned Fees 12,000 Fees Earned 660,000 Wages Expense 325,000 Rent Expense —

Depreciation Expense —

Supplies Expense —

Data needed for year-end adjustments are as follows:

• Unbilled fees at July 31, $11,150.

• Supplies on hand at July 31, $900.

• Rent expired, $6,000.

• Depreciation of equipment during year, $8,950.

• Unearned fees at July 31, $2,000.

• Wages accrued but not paid at July 31, $4,840.

Instructions 1. Journalize the six adjusting entries required at July 31, based on the data presented.

2. What would be the effect on the income statement if the adjustments for unbilled fees and accrued wages were omitted at the end of the year?

3. What would be the effect on the balance sheet if the adjustments for unbilled fees and accrued wages were omitted at the end of the year?

4. What would be the effect on the “Net increase or decrease in cash” on the statement of cash flows if the adjustments for unbilled fees and accrued wages were omitted at the end of the year?

AppendixLO1