Question

1. Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:

   Crazy Mountain Outfitters Co.
   Unadjusted Trial Balance
   April 30, 20Y5
   	Debit Balances		Credit Balances
   Cash	12,640
   Accounts Receivable	83,950
   Supplies	20,230
   Equipment	422,010
   Accounts Payable			19,720
   Unearned Fees			22,250
   Common Stock			55,000
   Retained Earnings			234,000
   Dividends	16,690
   Fees Earned			505,750
   Wages Expense	117,330
   Rent Expense	89,520
   Utilities Expense	64,230
   Miscellaneous Expense	10,120
   	836,720		836,720

   For preparing the adjusting entries, the following data were assembled:

   • Supplies on hand on April 30 were $7,470.
   • Fees earned but unbilled on April 30 were $9,150.
   • Depreciation of equipment was estimated to be $12,640 for the year.
   • Unpaid wages accrued on April 30 were $1,620.
   • The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $17,580 of the services was provided between April 1 and April 30.

   Required:

   1. Journalize the adjusting entries necessary on April 30, 20Y5. If an amount box does not require an entry, leave it blank.

   Apr. 30
   30
   30
   30
   30

   2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. before the adjusting entries.

   Revenues	$
   Expenses
   Net income	$

   3. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. after the adjusting entries.

   Revenues	$
   Expenses
   Net income	$

   4. Determine the effect of the adjusting entries on Retained Earnings.
   Retained Earnings   by $.

Answer 1

all amounts are in $

Transactions	Journal Entries	Dr. ($)	Cr. ($)
a	supplies expenses	12760
	To supplies		12760
b	accounts receivable	9150
	To fees earned		9150
c	depreciation expenses	12640
	To accumulated depreciation		12640
d	wages expenses	1620
	To accrued wages		1620
e	unearned fees	17580
	To fees earned		17580

Income Statement before adjustments
fees earned	505750
total revenue		505750
less operating expenses
wages expenses	117330
rent expenses	89520
utilities expenses	64230
miscellaneous expenses	10120
total operating expenses		281200
net income		224550

Income Statement after adjustments
fees earned	505750
adjustment b	9150
adjustment e	17580
total revenue		532480
less operating expenses
wages expenses	117330
adjustment d – accrued wages	1620
rent expenses	89520
utilities expenses	64230
miscellaneous expenses	10120
adjustment a – supplies expenses	12760
adjustment c – depreciation expenses	12640
total operating expenses		308220
net income		224260

retained earnings	before adjustment	after adjustment
beginning balance	234000	234000
net income	224550	224260
less dividend	16690	16690
ending balance	441860	441570