I ONLY NEED HELP WITH THE LAST SECTION TITLED : "ADJUSTING ENTRIES". However, the data in the table is what the information/question is based on.

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Mastery Problem: The Adjusting Process.

Unadjusted Financial Statements

These financial statements were prepared from the unadjusted trial balance.

Cole Designs Inc.
Income Statement
For the Year Ended December 31, 20Y3
Fees earned	$67,400
Wages expense	(44,900)
Net income	$22,500

Cole Designs Inc.
Balance Sheet
December 31, 20Y3
Assets
Cash			$5,500
Accounts receivable			31,800
Supplies			3,625
Prepaid insurance			3,600
Office equipment			11,000
Total assets			$55,525
Liabilities
Unearned fees			$7,700
Stockholders' Equity
Common stock	$12,000
Retained earnings	35,825		47,825
Total liabilities and stockholders' equity			$55,525

Adjusted Financial Statements

These financial statements were prepared from the adjusted trial balance.

Cole Designs Inc.
Income Statement
For the Year Ended December 31, 20Y3
Fees earned			$73,300
Expenses:
Wages expense	$46,600
Supplies expense	3,555
Insurance expense	2,400
Depreciation expense	2,100
Total expenses			(54,655)
Net income			$18,645

Cole Designs Inc.
Balance Sheet
December 31, 20Y3
Assets
Cash			$5,500
Accounts receivable			32,600
Supplies			70
Prepaid insurance			1,200
Office equipment	$11,000
Accumulated depreciation-office equipment	(2,100)		8,900
Total assets			$48,270
Liabilities
Wages payable			$1,700
Unearned fees			2,600
Total liabilities			$4,300
Stockholders' Equity
Common stock	$12,000
Retained earnings	31,970		43,970
Total liabilities and stockholders' equity			$48,270

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Accounting Bases

Under which basis of accounting would adjusting entries never be recorded?

Accrual basis of accountingCash basis of accountingCash basis of accounting

Which accounts would most likely not be used under the cash basis of accounting?

a.	Supplies Expense
b.	Unearned Fees
c.	Accounts Payable
d.	Revenue
e.	Accounts Receivable
f.	Cash

a, b and cb, c and dc, d and ea, c and db, c and eb, c and e

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Feedback

Keep in mind when revenues and expenses are recognized under the cash basis of accounting.

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Matching Principle/Revenue Recognition

Under the accrual basis of accounting, many of the account balances in the ledger at the end of the accounting period are reported on 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

A purchase made by a business is matched with the actual cost of the item.The accounting records and reports are matched with objective evidence.The expenses incurred during a period are matched with the revenue that those expenses generated.The transactions of a business are matched with the transactions of its stockholders, creditors and other businesses.The expenses incurred during a period are matched with the revenue that those expenses generated.

Under the accrual basis of accounting, the revenue recognition principle states that

Revenues may not be recognized until the company is deemed to be profitable.Revenues are recognized when a contract is signed with the customer.Revenues are recognized when services have been performed or products have been delivered to customers.Revenues are recognized when the cash is received.Revenues are recognized when services have been performed or products have been delivered to customers.

Review the following selected transaction data of a business for April. Keeping the matching principle in mind, indicate which of the following would be used to compute net income for the month of April.

a.	Cash paid in April for expenses incurred in May.
b.	Cash paid in April for expenses incurred in April.
c.	Cash received in April from customers for services performed in May.
d.	Expenses incurred in April but not paid until June.
e.	Services provided to customers on account during April.
f.	Cash received from cash customers for services performed in April.

a, b, c and da, c, d and eb, c, e and fb, d, e and fb, d, e and f

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Feedback

Review the definitions of the matching principle and revenue recognition. Pay particular attention to when revenues are earned and their related expenses are incurred.

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Overstated, Understated

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 Yes or No if the item was overstated, understated or neither on the financial statements prepared using the unadjusted trial balance.

	Overstated	Understated	Neither
Net income	YesNoYes	YesNoNo	YesNoNo
Stockholders' equity	YesNoYes	YesNoNo	YesNoNo
Revenues	YesNoNo	YesNoYes	YesNoNo
Total assets	YesNoYes	YesNoNo	YesNoNo
Total expenses	YesNoNo	YesNoYes	YesNoNo
Total liabilities	YesNoYes	YesNoNo	YesNoNo

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Feedback

Compare the amounts reported for the stated items of the two sets of financial statements.

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Adjusting Entries

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. If an amount box does not require an entry, leave it blank.

Dec. 31	Accounts PayableAccounts ReceivableAccumulated Depreciation-EquipmentCashFees EarnedAccounts Receivable	Accounts Receivable	Accounts Receivable
	Accounts PayableAccounts ReceivableCashFees EarnedUnearned FeesFees Earned	Fees Earned	Fees Earned
Dec. 31	Accounts PayableAccumulated Depreciation-EquipmentCashSuppliesSupplies ExpenseSupplies Expense	Supplies Expense	Supplies Expense
	Accounts PayableCashAccumulated Depreciation-EquipmentSuppliesSupplies ExpenseSupplies	Supplies	Supplies
Dec. 31	Accumulated Depreciation-EquipmentCashFees EarnedInsurance ExpensePrepaid InsuranceInsurance Expense	Insurance Expense	Insurance Expense
	Accounts ReceivableCashFees EarnedInsurance ExpensePrepaid InsurancePrepaid Insurance	Prepaid Insurance	Prepaid Insurance
Dec. 31	Accumulated Depreciation-EquipmentCashDepreciation ExpenseEquipmentSuppliesDepreciation Expense	Depreciation Expense	Depreciation Expense
	Accumulated Depreciation-Office EquipmentCashDepreciation ExpenseEquipmentFees EarnedAccumulated Depreciation-Office Equipment	Accumulated Depreciation-Office Equipment	Accumulated Depreciation-Office Equipment
Dec. 31	Accounts PayableCashFees EarnedWages ExpenseWages PayableWages Expense	Wages Expense	Wages Expense
	Accounts ReceivableCashInsurance ExpenseWages ExpenseWages PayableWages Payable	Wages Payable	Wages Payable
Dec. 31	Accounts PayableAccumulated Depreciation-EquipmentCashFees EarnedUnearned FeesUnearned Fees	Unearned Fees	Unearned Fees
	Accounts PayableAccounts ReceivableCashFees EarnedUnearned FeesFees Earned	Fees Earned	Fees Earned

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. If an amount box does not require an entry, leave it blank Dec. 31 Accounts Receivable Fees Earned Dec. 31 Supplies Expense Supplies V Dec. 31 Insurance Expense Prepaid Insurance 10 00 00 00 00 00 Dec. 31 Depreciation Expense 00 00 00 00 00 Accumulated Depreciation-Office Equipment Dec. 31 Wages Expense Wages Payable Dec. 31 Unearned Fees Fees Earned Feedback Check My Work When comparing the two sets of financial statements, observe the differences between the amounts reported for each item. Think about what entry would have been journalized to cause the change