Record adjustments. (LO 1, 2, 3)

The Fruit Packing Company has the following account balances at the end of the year:

The company also has the following information available at the end of the year:
1. Of the prepaid insurance, \(\$ 3,000\) has now expired.
2. Of the unearned revenue, \(\$ 2,000\) has been earned.
3. The company must accrue an additional \(\$ 1,500\) of wages expense.
4. The company has earned an additional \(\$ 500\) of interest income, not yet received.
\section*{Required}

a. Use the accounting equation to show the adjustments indicated at year-end.

b. Calculate the balances in each account after the adjustments.

c. Indicate whether each adjustment is an accrual or deferral.

Transcribed Image Text:

Prepaid insurance Unearned revenue $8,000 4,200 Wages expense 6,790 Taxes payable 4.168 Interest income 2,475