The following data are taken from an unadjusted trial balance at December 31, 2016:
Prepaid rent $600
Office supplies 700
Income taxes payable -0-
Unearned commissions revenue 1500
Salaries expense 5,000
a. The prepaid rent consisted of a payment for three months' rent at$200 per month for December 2016, January 2017, and February 2017.
b. Office supplies on hand at December 31, 2016 amounted to $300.
c. The estimated income taxes for 2016 are $5,000.
d. All but $500 in the Unearned Commissions account has been earned in 2016.
e. Salaries for the last three days of December amounting to $300 have not yet been recorded.
Required:
1. Prepare all necessary adjusting entries in general journal format at December 31, 2016. General ledger account numbers are not necessary.
2. Calculate the cumulative financial impact on assets, liabilities, shareholders' equity, revenue and expense if these adjusting entries are not made