Selected account balances before adjustment for Atlantic Coast Realty at July 31, the end of the current year, are as follows: Debits Credits $74,600 Accounts Receivable Equipment 348,900 Accumulated Depreciation-Equipment $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: Unbilled fees at July 31, $10,650. . Supplies on hand at July 31, $1,100 Rent expired, $6,350 Depreciation of equipment during year, $8,550. Unearned fees at July 31, $2,120. 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. 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 REVENUE 11 Cash 41 Fees Earned 12 Accounts Receivable 42 Rent Revenue 13 Supplies EXPENSES 14 Prepaid Rent 51 Advertising Expense 15 Land 52 Insurance Expense 16 Equipment 53 Rent Expense 17 Accumulated Depreciation-Equipment 54 Wages Expense LIABILITIES 55 Supplies Expense 21 Accounts Payable 56 Utilities Expense 54 Wages Expense 55 Supplies Expense LIABILITIES 21 Accounts Payable 56 Utilities Expense 22Unearned Fees 57 Depreciation Expense 59 Miscellaneous Expense 23 Wages Payable 24 Taxes Payable EQUITY 31 Owner's Equity 32 Withdrawals 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 ACCOUNTING EQUATION JOURNAL DEBIT ASSETS EQUITY DATE DESCRIPTION POST. REF CREDIT LIABILITIES Adjusting Entries 1 2 3 4 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? Amount Over/Understated Accounts receivable $ Total assets Wages payable Total liabilities Owner's equity $ Total liabilities and owner's 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
