Fishing Charters has collected the following data for the

December

31 adjusting entries:

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.Requirement 1. Journalize the adjusting entries needed on

December

31 for

Stewart

Fishing Charters. Assume

Stewart

records adjusting entries only at the end of the year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)a. The company received its electric bill on

December

20 for

$150

but will not pay it until

January

5. (Use the Utilities Payable account.)

Date			Accounts and Explanation	Debit	Credit
(a) Dec. 31			Accounts Payable	150

b.

Stewart

purchased a

three-month

boat insurance policy on

November

1 for

$3,300.

Stewart

recorded a debit to Prepaid Insurance.

Date			Accounts and Explanation	Debit	Credit
(b) Dec. 31

c. As of

December

31,

Stewart

had earned

$4,000

of charter revenue that has not been recorded or received.

Date			Accounts and Explanation	Debit	Credit
(c) Dec. 31

d.

Stewart's

fishing boat was purchased on

January

1 at a cost of

$77,000.

Stewart

expects to use the boat for

ten

years and that it will have a residual value of

$2,000.

Determine annual depreciation assuming the straight-line depreciation method is used.

Date			Accounts and Explanation	Debit	Credit
(d) Dec. 31

e. On

October

1,

Stewart

received

$5,500

prepayment for a deep-sea fishing charter to take place in

December.

As of

December

31,

Stewart

has completed the charter. (When the cash was received, assume that a liability account was credited.)

Date			Accounts and Explanation	Debit	Credit
(e) Dec. 31

Requirement 2. If

Stewart

had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understated.

Begin by completing the table for adjustment a and then transactions b through e.

	Specific Category of		Specific Category
Adjusting	Accounts on the	Over /	of Accounts on the	Over /
Entry	Balance Sheet	Understated	Income Statement	Understated
(a)

(b)

(c)

(d)

(e)

Choose from any list or enter any number in the input fields and then continue to the next question.