1. Diane Company completed its first year of operations on December 31. All of the year's entries have been recorded except for the following: a. At year-end, employees earned wages of $4,000, which will be paid on the next payroll date in January of next year. b. At year-end, the company had earned interest revenue of $1,500. The cash will be collected March 1 of next year. 2. Aubrae Company is making adjusting entries for the year ended December 31 of the current year. In developing information for the adjusting entries, the accountant learned the following: a. A two-year insurance premium of $4,800 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance on October 1. b. At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting documents.

Shipping supplies on hand, January 1 of the current year $ 13,000

Purchases of shipping supplies during the current year 75,000

Shipping supplies on hand, counted on December 31 of the current year 20,000

Required: For each of the transactions in Diane Company and Aubrae Company, indicate the amount and the direction of effects of the adjusting entry on the elements of the balance sheet and income statement. Using the table below, indicate + for increase and - for decrease.

1. Diane Company completed its first year of operations on December 31. All of the year's entries have been recorded except for the following: a. At year-end, employees earned wages of $4,000, which will be paid on the next payroll date in January of next year. b. At year-end, the company had earned interest revenue of$1,500. The cash will be collected March 1 of next year. 2. Aubrae Company is making adjusting entries for the year ended December 31 of the current year In developing information for the adjusting entries, the accountant learned the following a. A two-year insurance premium of $4,800 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance on October 1 b. At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting documents 13,000 Shipping supplies on hand, January 1 of the current year 75,000 Purchases of shipping supplies during the current year 20,000 Shipping supplies on hand, counted on December 31 of the current year Required: For each of the transactions in Diane Company and Aubrae Company, indicate the amount and the direction of effects of the adjusting entry on the elements of the balance sheet and income statement. Using the table below, indicate for increase and for decrease. Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Net Income Transaction Revenues Expenses (4,000) 4,000 (1-a) 4,000 (1-b) 1,500 1,500 1,500 1,500 (2-a) (2-b)