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

	Debits	Credits
Accounts Receivable	$ 77,000
Equipment	349,900
Accumulated DepreciationEquipment		$113,200
Prepaid Rent	8,800
Supplies	3,480
Wages Payable
Unearned Fees		11,400
Fees Earned		655,600
Wages Expense	327,900
Rent Expense
Depreciation Expense
Supplies Expense

Data needed for year-end adjustments are as follows:

	Unbilled fees at July 31, $11,400.
	Supplies on hand at July 31, $1,090.
	Rent expired, $5,950.
	Depreciation of equipment during year, $8,900.
	Unearned fees at July 31, $2,260.
	Wages accrued but not paid at July 31, $4,920.

	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.
2.	What would be the effect on the income statement if the adjustments for unbilled fees and accrued wages were omitted at the end of the year?
3.	What would be the effect on the balance sheet if the adjustments for unbilled fees and accrued wages 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 cash flows if the adjustments for unbilled fees and accrued wages were omitted at the end of the year?

CHART OF ACCOUNTS

Alantic Coast Realty

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Supplies
14	Prepaid Rent
15	Land
16	Equipment
17	Accumulated Depreciation-Equipment

	LIABILITIES
21	Accounts Payable
22	Unearned Fees
23	Wages Payable
24	Taxes Payable

	EQUITY
31	Owners Equity
32	Withdrawals

	REVENUE
41	Fees Earned
42	Rent Revenue

	EXPENSES
51	Advertising Expense
52	Insurance Expense
53	Rent Expense
54	Wages Expense
55	Supplies Expense
56	Utilities Expense
57	Depreciation Expense
59	Miscellaneous Expense

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.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
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 the adjustments for unbilled fees and accrued wages 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 the adjustments for unbilled fees and accrued wages were omitted at the end of the year?

	Over/Understated	Amount
Accounts receivable
Total assets
Wages payable
Total liabilities
Owners equity
Total liabilities and owners equity

4. What would be the effect on the Net increase or decrease in cash on the statement of cash flows if the adjustments for unbilled fees and accrued wages were omitted at the end of the year? over/understated/no effect