1) At the beginning of January, the first month of the accounting year, the supplies account had a debit balance of $825. During January, Purchases of $260 of supplies were debited to the account. Although only $530 of supplies was on hand at the end of January, the necessary adjusting entry was omitted. How will the omission affect (a) the income statement for January and (b) the balance sheet prepared as of January 31?

2) The Publisher of International View, a monthly magazine, received two year subscriptions totaling $12,240 on January 1. (a) What entry should be made to record the receipt of the $12,240? (b) What entry should be made at the end of January before financial statements are prepared for the month?

3) Globe Travel Agency pays an employee $600 in wages each Friday for a five-day work week ending on that day. The last Friday of January falls on January 27. What adjusting entry should be made on January 31, the fiscal year-end?

4) The Bayou Company earns interest amounting to $425 per month on its investments. The company receives the interest every six months, on December 31 and June 30. Monthly financial statements are prepared. What adjusting entry should be made on January 31

5) Critical Thinking-Most journal entries start with a document of some kind (check, invoice, etc). How do calcualte the amount of adjustments without a specific document?

6) On January 1, Prepaid Insurance was debited with the cost of a two-year premium in the amount of $3,744. What adjusting entry should be made on January 31 before the January financial statements are prepared?