You have been given the following information for RPE Consulting for the year ended July 31, 2014.

Required
1. Prepare the company's income statement, statement of changes in equity, and balance sheet. Assume that the owner, Ray Edds, invested $20,000 during the year ended July 31, 2014.
Analysis Component:
2. Analyze the unadjusted and adjusted trial balances and identify the adjustments that must have been made by inserting them in the two middle columns. Label each entry with a letter.
3. If the adjustments had not been recorded, identify the net overstatement / understatement of each component of the accounting equation.

Part 1 Refer to Westjet's income statement in Appendix II at the end of the textbook.
a. Prepare two possible adjusting entries that would have caused 2011 Guest revenues to increase.
b. Prepare two possible adjusting entries that would have caused 2011 Aircraft leasing expenses to increase.
Part 2
Refer to Westjet's balance sheet in Appendix II at the end of the textbook.
c. Prepare the possible adjusting entry that would have caused the December 31, 2011, balance in prepaid expenses and deposits to decrease.
d. Prepare a possible adjusting entry that would have caused the December 31, 2011, balance in Accounts payable and accrued liabilities to increase.

Transcribed Image Text:

RPE Consulting Trial Balances July 31, 2014 Unadjusted Adjusted Trial Balance Trial Balance Adjustments Dr. Dr. Cr. Cr. Dr. Cr. s 10,200 Account 7 Accounts payable 8 Accounts receivable 9,300 s 12,000 s 22,460 office equipment 12,000 18,000 13,800 27,000 10 Advertising expense 11 Cash 12 Consulting fees earned 13 Depreciation expense, 14,700 27,000 156,000 168,160 office equipment 6,000 2,440 2,200 14 Insurance expense 15 Interest expense 16 Interest payable 17 Notes payable 18 Office equipment 19 Office supplies 20 Office supplies expense 21 Prepaid insurance 22 Ray Edds, capital 23 Ray Edds, withdrawals 24 Rent expense 25 Salaries expense 26 Salaries payable 27 Unearned consulting fees 28 Totals 1,400 800 44,000 44,000 92,000 18,000 92,000 3,000 15,000 4,880 7,320 28,420 28,420 10,000 13,200 71,000 10,000 13,200 77,600 16,000 265,720 5 265,720 6,600 14.300 5 290,480 5 290,480