Instructions On March 31, the following data were accumulated to assist the accountant in preparing the adjusting entries for Potomac Realty: The supplies account balance on March 31 is $5,635, the supplies on hand on March 31 are $1,495. The unearned rent account balance on March 31 is $4,600 representing the receipt of an advance payment on March 1 of four months' rent from tenants. Wages accrued but not paid at March 31 are $2,035. Fees accrued but unbilled at March 31 are $15,450. Depreciation of office equipment is $4,420. Required: 1. Journalize the adjusting entries required at March 31. Refer to the Chart of Accounts for exact wording of account titles. 2. What is the difference between adjusting entries and correcting entries? Chart of Accounts CHART OF ACCOUNTS Potomac Realty General Ledger Potomac Realty General Ledger ASSETS REVENUE 11 Cash 41 Fees Earned 12 Accounts Receivable 42 Rent Revenue 13 Supplies 14 Prepaid Insurance EXPENSES 15 Land 51 Advertising Expense 52 Insurance Expense 16 Office Equipment 17 Accumulated Depreciation Office Equipment 53 Rent Expense 54 Wages Expense LIABILITIES 55 Supplies Expense 21 Accounts Payable 56 Utilities Expense 22 Unearned Rent 57 Depreciation Expense 23 Wages Payable 59 Miscellaneous Expense 24 Taxes Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends Final Question 2. What is the difference between adjusting entries and correcting entries? Correcting entries are a planned part of the accounting process, adjusting entries are not planned but arise when necessary to adjust errors. Both adjusting entries and correcting entries are a planned part of the accounting process. Both adjusting entries and correcting entries are not a planned part of the accounting process. Adjusting entries are a planned part of the accounting process, correcting entries are not planned but arise when necessary to correct errors. Sears Editing Company UNADJUSTED TRIAL BALANCE January 31, 20Y1 ACCOUNT TITLE DEBIT CREDIT 1 Cash 7,565.00 2 Accounts Receivable 38,860.00 3 Prepaid Insurance 7,310.00 4 Supplies 2,435.00 5 Land 117,450.00 6 Building 153,100.00 7 Accumulated Depreciation-Building 87,230.00 8 Equipment 137,150.00 9 Accumulated Depreciation Equipment 99,160.00 10 Accounts Payable 12,005.00 11 Unearned Rent 6,425.00 12 Common Stock 74,720.00 13 Retained Earnings 156,765.00 14 Dividends 14,500.00 15 Fees Earned 327,050.00 Supplies 2,455.00 5 Land 117,450.00 6 Building 153,100.00 7 Accumulated Depreciation-Building 87,230.00 8 Equipment 137,150.00 9 Accumulated Depreciation-Equipment 99,160.00 10 Accounts Payable 12,005.00 11 Unearned Rent 6,425.00 12 Common Stock 74,720.00 13 Retained Earnings 156,765.00 14 Dividends 14,500.00 15 Fees Earned 327,050.00 16 Salaries and Wages Expense 196,570.00 17 Utilities Expense 42,485.00 18 Advertising Expense 22,730.00 19 Repairs Expense 17,280.00 20 Miscellaneous Expense 5,920.00 21 Totals 763,355.00 763,355.00 The data needed to determine year-end adjustments are as follows: a. Unexpired insurance at January 31, $5,985. b. Supplies on hand at January 31, $470. c. Depreciation of building for the year, $7,900. d. Depreciation of equipment for the year, $4,590. e. Rent unearned at January 31, $1,560. f. Accrued salaries and wages at January 31, $3,085. g. Fees earned but unbilled on January 31, $11,010. Required: 1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense-Building; Depreciation Expense-Equipment; and Supplies Expense. Refer to the Chart of Accounts for exact wording of account titles. 2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. General Ledger ASSETS REVENUE 11 Cash 41 Fees Earned 12 Accounts Receivable 42 Rent Revenue 13 Prepaid Insurance 14 Supplies EXPENSES 15 Land 51 Salaries and Wages Expense 16 Building 52 Utilities Expense 17 Accumulated Depreciation-Building 53 Advertising Expense 18 Equipment 54 Repairs Expense 19 Accumulated Depreciation-Equipment 55 Depreciation Expense-Building 56 Depreciation Expense-Equipment LIABILITIES 57 Insurance Expense 21 Accounts Payable 58 Supplies Expense 22 Unearned Rent 59 Miscellaneous Expense 23 Salaries and Wages Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3 4 5 6 7 8 9 10 11 2. Determine the revenues, expenses, and net income of Trident Repairs & Service before the adjusting entries. Before Adjusting Entries 1 Revenues 2 Expenses 3 Net income 3. Determine the revenues, expenses, and net income of Trident Repairs & Service after the adjusting entries. After Adjusting Entries 1 Revenues 2 Expenses 3 Net income 4. Determine the effect of the adjusting entries on Retained Earnings. The Retained Earnings account by $