PR 3-2A Adjusting entries

Selected account balances before adjustment for Alantic Coast Realty at July 31, 2016, the end of the current year are as follows:

Debits Credits

Accounts receivable 75,000

Equipment 345,700

Accumulated Depreciation-equipment 112,500

Prepaid Rent 9,000

Supplies 3,350

Wages Payable ------

Unearned fees 12,000

Fees Earned 660,000

Wages Expense 325,000

Rent Expense -------

Depreaciation Expense -------

Supplies Expense -------

Data needed for year-end adjustments are as follows

a.Unbilled fees at July 31, $11,150

b.Supplies on hand at July 31, $900

c.Rent expired, $6,000

d.Depreciation of equipment during year, $8,950

e.Unearned fees at July 31, $2,000

f.Wages accrued but not paid at July 31, $4840

Instructions

1.Journalize the six adjusting entries required at July 31, based on the data presented.

2.What would be the effect on the income statement if adjustments (a) and (f) were omitted at the end of the year

3.What would be the effect on the balance sheet if adjustments (a) and (f) were omitted at the end of the year

4.What would be the effect on the net increase or decrease in cash on the statement of the cash flows if adjustments (a) and (f) were omitted at the end of the year