Jackson Consulting

Unadjusted Trial Balance December 31, 2018

Debits Credits

Cash $ 11,500

Accounts Receivable 3,500

Supplies 1,200

Prepaid Rent 24,000

Equipment 14,000

Accumulated Depreciation $1,400

Accounts Payable 1,900

Unearned Service Revenue 2,800

Common Stock 10,300

Retained Earnings 7,500

Dividends 4,500

Service Revenue 91,350

Salaries Expense 55,000

Advertising Expense 900

Utilities Expense 650

Total: Debits =$115,250 Credits total = $115,250

Additional Information:

1.) The equipment was purchased on January 1, 2017. The useful life is estimated to be 10 years.

2.) As of December 31, 2018, the company had accrued salaries of $950.

3.) Of the balance in the unearned revenue account, $500 had not been earned by year -end.

4.) On December 1, 2018, the company paid $900 for four months of advertising.

5.) A count of supplies on December 31, 2018 showed $400 of supplies had been used during the year.

6.) On May 1, 2018, the company rented an office building for one year and paid $24,000 in cash.

What would the effect on Jackson's balance sheet be if adjusting entry ( c ) is not recorded?

	A.	Liabilities overstated and stockholders' equity understated
	B.	Assets overstated and liabilities understated
	C.	Assets overstated and stockholders' equity understated
	D.	Assets understated and stockholders' equity overstated
	E.	There will be no effect on Jackson's balance sheet.