Question
Selected account balances before adjustment for Intuit Realty at November 30, the end of the current year, follow: Debits Credits Accounts Receivable $69,490 Equipment 107,000
Selected account balances before adjustment for Intuit Realty at November 30, the end of the current year, follow:
Debits | Credits | |||
Accounts Receivable | $69,490 | |||
Equipment | 107,000 | |||
Accumulated Depreciation - Equipment | $10,700 | |||
Prepaid Rent | 8,800 | |||
Supplies | 2,080 | |||
Wages Payable | _ | |||
Unearned Fees | 9,590 | |||
Fees Earned | 405,820 | |||
Wages Expense | 136,900 | |||
Rent Expense | _ | |||
Depreciation Expense | _ | |||
Supplies Expense | _ |
Data needed for year-end adjustments are as follows:
Required:
- Supplies on hand at November 30, $630.
- Depreciation of equipment during year, $1,040.
- Rent expired during year, $6,390.
- Wages accrued but not paid at November 30, $2,020.
- Unearned fees at November 30, $4,030.
- Unbilled fees at November 30, $4,790.
1. Journalize the six adjusting entries required at November 30, based on the data presented.
2. What would be the effect on the income statement if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year? Enter all amounts as positive numbers.
Fees earned | (understated or overstated) | by $ |
Depreciation expense | (understated or overstated) | by $ |
Net income | (understated or overstated) | by $ |
3. What would be the effect on the balance sheet if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year? Enter all amounts as positive numbers.
Accumulated depreciation | (understated or overstated) | by $ |
Total assets | (understated or overstated) | by $ |
Unearned fees | (understated or overstated) | by $ |
Total liabilities | (understated or overstated) | by $ |
Owner's equity | (understated or overstated) | by $ |
Total liabilities and owner's equity | (understated or overstated) | by $ |
4. What would be the effect on the Net increase or decrease in cash on the statement of cash flows if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year?
Nov. 30 30 0 0 30 30 30 0 30Step by Step Solution
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