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	$ 74,600
Equipment	348,900
Accumulated DepreciationEquipment		$112,600
Prepaid Rent	9,200
Supplies	3,200
Wages Payable
Unearned Fees		14,400
Fees Earned		679,600
Wages Expense	338,800
Rent Expense
Depreciation Expense
Supplies Expense

Data needed for year-end adjustments are as follows:

a.	Unbilled fees at July 31, $10,650.
b.	Supplies on hand at July 31, $1,100.
c.	Rent expired, $6,350.
d.	Depreciation of equipment during year, $8,550.
e.	Unearned fees at July 31, $2,120.
f.	Wages accrued but not paid at July 31, $4,890.

Required

1.

Journalize the six adjusting entries required at July 31, based on the data presented. Refer to the Chart of Accounts for exact wording of account titles.

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1		Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13

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

Over/Understated	Amount
Fees earned
Wages expense
Net income

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

Over/Understated	Amount
Accounts receivable
Total assets
Wages payable
Total liabilities
Retained earnings
Total liabilities and stockholders equity

4.

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