Question 2

Following are two income statements for Alexis Co. for the year ended December 31. The left column is prepared before any adjusting entries are recorded, and the right column includes the effects of adjusting entries. The company records cash receipts and payments related to unearned and prepaid items in balance sheet accounts ALEXIS CO Income Statements For Year Ended December 31 Unadjusted Adjusted Revenues $24,000 30,600 Fees earned Commissions earned 42,500 42,500 Total revenues 66,500 73,100 Expenses Depreciation expense-Computers 1,650 Depreciation expense office furniture 0 1,925 Salaries expense 12,500 15,195 Insurance expense Rent expense Office supplies expense 1,430 4,500 4,500 528 Advertising expense 3,000 3,000 Utilities expense 1,250 1,327 Total expenses 21,250 29,555 $45,250 43,545 Net income Analyze the statements and prepare the eight adjusting entries that likely were recorded. (Note: 30% of the $6,600 adjustment for Fees Earned has been earned but not billed, and the other 70% has been earned by performing services that were paid for in advance.)