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B. Below are 4 adjusting journal entries (AJEs) that another firm, Wolverine, failed to make at year end. For each entry NOT MADE indicate the

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B. Below are 4 adjusting journal entries (AJEs) that another firm, Wolverine, failed to make at year end. For each entry NOT MADE indicate the effect that each omitted AJE would have on the Wolverine's financial statements for the year ended 12/31/2020. Use 0 for overstated, U for understated, and NE for no effect. Organize your answer in tabular form, using the column headings shown below and provided in the worksheet titled "Part A, Question B." Example 0: At year end, Wolverine failed to make the below AJE to record that fact that employees earned $4,000 in wages which will be paid on the next payroll date in January 2020. Compensation Expense (+E, -NI, -R/E, -SE) 4,000 Salaries Payable (+L) 4,000 If that adjustment was not made expenses and liabilities would be understated by $4,000. If expenses are understated, then Net Income and Stockholders' Equity will be overstated. Income Statement Balance Sheet Adjusting Revenue - Expense Net Assets = Liabilities + Stockholders' Equity entry Income Example 0 NE U 0 NE U o AJE #1: At year end, Wolverine failed to make the below AJE to recognize that a tenant owed Wolverine $1,000 rent for the month of December. The rent is due to Wolverine in January of 2021. Rent Receivable 1,000 Rent Revenue 1,000 AJE #2: At year end, Wolverine failed to make the below AJE to record that Wolverine had some debt that had accrued interest of $500. Interest Expense 500 Interest Payable 500 AJE #3: At year end, Wolverine failed to make the below AJE to record that Wolverine performed $2,000 in services in December that had been prepaid by the customer in November. Note that when the services were paid for in November, Wolverine increased (debited) cash and increased (credited) Uneared Service Revenue, a liability account. Uneared Service Revenue 2,000 Service Revenue 2,000 AJE #4: At year end, Wolverine failed to make the below AJE to record depreciation of $1,000. Depreciation Expense 1,000 Accumulated Depreciation 1,000

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