Instructions Sentry Transport Inc. of Atlanta provides in-town parcel delivery services in addition to a full range of passenger services. Sentry engaged in the following activities during the current year: a. Sentry received $5,000 cash in advance from Rich's Department Store for an estimated 250 deliveries during December 2019 and January and February of 2020. The entire amount was recorded as unearned revenue when received. During December 2019, 110 deliveries were made for Rich's. b. Sentry operates several small buses that take commuters from suburban communities to the central downtown area of Atlanta. The commuters purchase, in advance, tickets for 50 oneway rides. Each 50-ride ticket costs $500. At the time of purchase, Sentry credits the cash received to unearned revenue. At year end, Sentry determines that 10,160 one-way rides have been taken. c. Sentry operates several buses that provide transportation for the clients of a social service agency in Atlanta. Sentry bills the agency quarterly at the end of January, April, July, and October for the service performed that quarter. The contract price is $7,500 per quarter. Sentry follows the practice of recognizing revenue from this contract in the period in which the service is performed. d. On December 23, Delta Airlines chartered a bus to transport its marketing group to a meeting at a resort in southern Georgia. The meeting will be held during the last week in January 2020, and Delta agrees to pay for the entire trip on the day the bus departs. At year end, none of these arrangements have been recorded by Sentry. Required: 1. Prepare adjusting entries at December 31 for these four activities. 2. Conceptual Connection: What would be the effect on revenue if the adjusting entries were not made? Chart of Accounts General Ledger REVENUE ASSETS 111 Cash 411 Sales Revenue 121 Accounts Receivable 412 Service Revenue 122 Notes Receivable 413 Interest Income 123 Supplies 414 Rent Revenue 124 Prepaid Insurance 125 Prepaid Rent EXPENSES 126 Inventory 127 Interest Receivable 511 Cost of Goods Sold 512 Advertising Expense 513 Supplies Expense 514 Utilities Expense 130 Investment 131 Land 132 Buildings 515 Rent Expense 516 Insurance Expense 133 Equipment 134 Furniture 521 Wages Expense 135 Trucks 531 Interest Expense 532 Depreciation Expense 139 Accumulated Depreciation 541 Income Taxes Expense Chart of Accounts LIABILITIES 211 Accounts Payable 212 Notes Payable 213 Income Taxes Payable 214 Wages Payable 215 Utilities Payable 216 Insurance Payable 217 Rent Payable 221 Interest Payable 222 Unearned Service Revenue 223 Unearned Rent Revenue 231 Bonds Payable EQUITY 311 Common Stock 321 Retained Earnings 331 Dividends 350 Income Summary General Journal General Journal Instructions PAGE 1 IMPACT ON FINANCIAL STATEMENTS GENERAL JOURNAL BALANCE SHEET INCOME STATEMENT DATE POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY REVENUE EXPENSES NET INCOME ACCOUNT TITLE Adjusting Entries Final Question 2. Conceptual Connection: What would be the effect on revenue if the adjusting entries were not made? Additional Instruction a. Without this adjusting entry, revenue would and liabilities would b. Without this adjusting entry, revenue would and liabilities would c. Without this adjusting entry, revenue would and assets would d. Without this adjusting entry, revenue would and assets would Cumulatively, if these transactions were not made, revenue would by $
