> 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 Wages expense Net income Cash Accounts receivable Supplies Prepaid insurance Office equipment Total assets $69,000 (44,150) $24,850 Cole Designs Inc. Balance Sheet December 31, 20Y3 Assets Liabilities Unearned fees Stockholders' Equity Common stock Retained earnings Total liabilities and stockholders' equity Check My Work 3 more Check My Work uses remaining. $5,750 32,000 3,500 4,200 11,000 $56,450 $9,200 $12,000 35,250 47,250 $56,450 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 $74,650 Expenses: Wages expense $46,300 Supplies expense 3,390 Insurance expense 2,400 Depreciation expense 2,100 Total expenses (54,190) Net income $20,460 Cash Accounts receivable Supplies Prepaid insurance Office equipment Cole Designs Inc. Balance Sheet December 31, 20Y3 Assets Accumulated depreciation-office equipment Total assets Liabilities $5,750 32,550 110 1,800 $11,000 (2,100) 8,900 $49,110 Accounts receivable Supplies 32,550 110 Prepaid insurance 1,800 Office equipment $11,000 Accumulated depreciation-office equipment (2,100) 8,900 Total assets $49,110 Liabilities Wages payable Unearned, fees Total liabilities $2,150 4,100 $6,250 Stockholders' Equity Common stock $12,000 Retained earnings 30,860 42,860 Total liabilities and stockholders' equity $49,110 Accounting Bases Under which basis of accounting would adjusting entries never be recorded? Accrual basis of accounting X 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 cd and e X Compare the amounts reported for the end dems of the two sets of fancial statements Adjusting Entries Journalize the six December 31 adjusting wees for Cole besigns 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, Dec. 31 counts Aestivable Een Lached bec. 31 expense V 00 00 00 00 00 00 00 00 00 bec. 31 Intrance, boeme bonged Insurance Dec 31 Deprecation Expense mulated Reprmation Office open. Dec. 31 SON