Question

please make sure complete all the parts of the questions

Adjusting Entries

Selected account balances before adjustment for Intuit Realty at November 30, the end of the current year, follow:

	Debits		Credits
Accounts Receivable	$66,980
Equipment	103,000
Accumulated Depreciation - Equipment			$10,310
Prepaid Rent	8,400
Supplies	2,010
Wages Payable			_
Unearned Fees			9,240
Fees Earned			391,160
Wages Expense	131,950
Rent Expense	_
Depreciation Expense	_
Supplies Expense	_

Data needed for year-end adjustments are as follows:

Required:

Supplies on hand at November 30, $600.

Depreciation of equipment during year, $1,000.

Rent expired during year, $6,160.

Wages accrued but not paid at November 30, $1,940.

Unearned fees at November 30, $3,880.

Unbilled fees at November 30, $4,620.

1. Journalize the six adjusting entries required at November 30, based on the data presented.

Nov. 30
30
30
30
30
30

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		by $
Depreciation expense		by $
Net income		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		by $
Total assets		by $
Unearned fees		by $
Total liabilities		by $
Owner's equity		by $
Total liabilities and owner's equity		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?

Answer 1

1	date		dr ($)	cr ($)
	Nov-30	supplies expense	1410			2010-600=	1410
		supplies		1410
	Nov-30	Depreciation expense	1000
		Accumulated Depreciation		1000
	Nov-30	rent expense	6160
		prepaid rent		6160
	Nov-30	wages expense	1940
		wages payable		1940
	Nov-30	unearned fees	5360			9240-3880=	5360
		Fees earned		5360
	Nov-30	accounts receivable	4620
		Fees earned		4620
2
		fees earned		5360		(understated)
		depreciation exp		1000		(understated)
		net income by		4360		net income understated by $4360
3		Accumulated Depreciation by		1000		(understated)
		total assets by		1000		net assets = assets at historical cost - accumulated depeciation	overstated
		unearned fees by		5360		(overstated)
		total liabilities by		5360		(overstated)
		owners equity		4360		net income is added to retained earnings which is part of owners equity	understated
		total liabilities and owners equity by		1000		total assets=total liabilities + owners equity	overstated
4		Both will have no effect on net cash increase or decrease since they are adjustment enries cash is not affected