9Questions in red are incorrect

Unadjusted Financial Statements These financial statements were prepared from the unadjusted trial balance Cole Designs Inc. Income Statement For the Year Ended December 31, 2017 Fees earned $70,600.00 2 Wages expense 44,900.00 3 Net income $25,700.00 Cole Designs Inc. Balance Sheet December 31, 2017 Assets 2 Cash $4,000.00 3 Accounts receivable 32,600.00 4 Supplies 3,625.00 4,000.00 5 Prepaid insurance 6 Office equipment 11,000.00 7 Total assets $55,225.00 Liabilities 9 Unearned fees $7,700.00 Stockholders' Equity 11 Common stock $12.000,00 12 Retained earnings 35,525.00 47,525.00 13 Total liabilities and stockholders' equity $55,225.00 Cole Designs Inc. Income Statement For the Year Ended December 31, 2017 Fees earned $77,000.00 Expenses: Wages expense $47,200.00 Supplies expense 3,515.00 Insurance expense 2,900.00 Depreciation expense 2,000.00 Total expenses 55,615.00 8 Net income $21,385.00 Balance Sheet December 31, 2017 Assets Cash $4,000.00 3 Accounts receivable 33,000.00 4 Supplies 110.00 1,100.00 5 Prepaid insurance Office equipment $11,000.00 (2,000.00 Accumulated depreciation office equipment 9,000.00 Total assets $47,210.00 Liabilities 10 Wages payable $2,300.00 11 Unearned fees 1,700.00 12 Total liabilities $4,000.00 Stockholders' Equity 14 Common stock $12,000.00 15 Retained earnings 31,210.00 43,210.00 16 Total liabilities and stockholders' equity $47,210.00 CHART OF ACCOUNTS Cole Designs Inc. General Ledger ASSETS REVENUE 11 Cash 41 Fees Earned 12 Accounts Receivable 42 Rent Revenue 14 Supplies EXPENSES 15 Prepaid Insurance 17 Land 18 Office Equipment 19 Accumulated Depreciation Office Equipment 51 Wages Expense 52 Supplies Expense 53 Rent Expense 54 Utilities Expense 55 Insurance Expense 56 Depreciation Expense 59 Miscellaneous Expense LIABILITIES 21 Accounts Payable 22 Wages Payable 23 Unearned Rent 24 Unearned Fees ASSETS REVENUE 11 Cash 41 Fees Earned 12 Accounts Receivable 42 Rent Revenue 14 Supplies 15 Prepaid Insurance EXPENSES 17 Land 18 Office Equipment 19 Accumulated Depreciation Office Equipment 51 Wages Expense 52 Supplies Expense 53 Rent Expense 54 Utilities Expense 55 Insurance Expense 56 Depreciation Expense 59 Miscellaneous Expense LIABILITIES 21 Accounts Payable 22 Wages Payable 23 Unearned Rent 24 Unearned Fees EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends Accounting Bases Shaded cells have feedback. Under which basis of accounting would adjusting entries never be recorded? O Accrual basis of accounting Cash basis of accounting Points: 1/1 Which accounts would most likely not be used under the cash basis of accounting? Check all that apply. Supplies Expense Accounts Payable Accounts Receivable Unearned Fees Revenue O Cash Matching Principle/Revenue Recognition Shaded cells have feedback. Under the accrual basis of accounting, many of the account balances in the ledger at the end of the accounting period are reported in the financial statements without change. Some accounts require updating, though. When preparing financial statements, the economic life of the business is divided into time periods. The matching principle states that The transactions of a business are matched with the transactions of its stockholders, creditors and other businesses O A purchase made by a business is matched with the actual cost of the item. The expenses incurred during a period are matched with the revenue that those expenses generated. The accounting records and reports are matched with objective evidence. Points: 1/1 Under the accrual basis of accounting, the revenue recognition principle states that O Revenues are recognized when the cash is received. Revenues may not be recognized until the company is deemed to be profitable. Revenues are recognized when services have been performed or products have been delivered to Points: 1/1 Review the following selected transaction data of a business for November. Keeping the matching principle in mind, indicate which of the following would be used to compute net income for the month of November. Check all that apply. Cash paid in November for expenses incurred in October. Expenses incurred in November but not paid until December. Cash paid in November for expenses incurred in November. Services provided to customers on account during November. O Cash received in November from customers for services performed in October. Cash received from cash customers for services performed in November. Overstated, Understated Shaded cells have feedback Assume that the Cole Designs Inc. financial statements in the Unadjusted Financial Statements panel were prepared from the unadjusted trial balance and the financial statements in the Adjusted Financial Statements panel were prepared from the adjusted trial balance. For the following financial statement items, indicate if the item was overstated, understated or neither in the financial statements prepared using the unadjusted trial balance. Overstated Understated Neither Net income Stockholders' equity Revenues Joo oo Total assets Total expenses Total liabilities Adjusting Entries Shaded cells have feedback Journalize the six December 31 adjusting entries for Cole Designs Inc. that adjusted the accounts to arrive at the financial statements in the Adjusted Financial Statements panel. Refer to the Chart of Accounts for exact wording of account titles. Record each adjustment as a separate entry. How does grading work? Adjusting Entries Shaded cells have feedback. JOURNAL Score: 114/151 DATE POST. REF. DEBIT CREDIT ACCOLINTING. FOLIATION ASSETS LIABILITIES EQUITY DESCRIPTION Adjusting Entries Dec. 31 Accounts Receivable 77,000.00 Fees Earned 77,000.00 Dec 31 Unearned Fees 47,200.00 Fees Earned 5,100.00 2,600.00 Dec. 31 Wages Expense Dec. 31 Supplies Expense Wages Payable 3,420.00 2,600.00 Shaded cells have teedback. 2,600.00 Adjusting Entries Dec. 31 Wages Expense Dec. 31 Supplies Expense Wages Payable 3,420.00 2,600.00 Supplies 3,420.00 Dec. 31 Insurance Expense 2,500.00 Prepaid Insurance 2,500.00 Dec. 31 Depreciation Expense 1,900.00 Accumulated Depreciation Office Equipment 1,900.00