Question

In: Accounting

Analyze the statements and prepare the eight adjusting entries a through g that likely were recorded....

Analyze the statements and prepare the eight adjusting entries a through g that likely were recorded. Note: Answer for a has two entries 30% of (i) the $5,400 adjustment for Fees Earned has been earned but not billed, and (ii) the other 70% has been earned by performing services that were paid for in advance.

Following are two income statements for Alexis Co. for the year ended December 31. The left number column is prepared before any adjusting entries are recorded, and the right column includes the effects of adjusting entries. The company records cash receipts and payments related to unearned and prepaid items in balance sheet accounts. The middle column shows a blank space for each income statement effect of the eight adjusting entries a through g (the balance sheet part of the entries is not shown here).

ALEXIS CO.
Income Statements
For Year Ended December 31
Unadjusted Adjustments Adjusted
Revenues
Fees earned $ 24,000 a. $ 29,400
Commissions earned 42,500 42,500
Total revenues $ 66,500 71,900
Expenses
Depreciation expense—Computers 0 b. 1,350
Depreciation expense—Office furniture 0 c. 1,575
Salaries expense 12,500 d. 14,705
Insurance expense 0 e. 1,170
Rent expense 4,500 4,500
Office supplies expense 0 f. 432
Advertising expense 3,000 3,000
Utilities expense 1,250 g. 1,313
Total expenses 21,250 28,045
Net income $ 45,250 $ 43,855

Solutions

Expert Solution

Adjusting Jounal entries

Account Titles and Explanation Debit Credit
a. Accounts receivables [Note 1] $1,620
Fees earned $1,620
[To record accrued fees earned]
Unearned fees revenue $3,780
Fees earned [$5,400 - $1,620] $3,780
[To record accrued fees earned]
b Depreciation expense—Computers $1,350
Accumulated depreciation - Computers $1,350
[To record depreciation expense]
c. Depreciation expense—Office furniture $1,575
Accumulated depreciation - Office furniture $1,575
[To record depreciation expense]
d. Salaries expense [$14,705 - $12,500] $2,205
Salaries payable $2,205
[To record accrued salary expense]
e. insurance expense $1,170
Pre-piad Insurance $1,170
{To record insurance expense]
f. Office supplies expense $432
Supplies $432
[To record supplies consumed]
g. Utilities expense [$1,313 - $1,250] $63
Accounts payable $63
[To record utilities expense]

Note 1

Billing of fees earned which was unbilled earlier at the year end = $5,400 x 30% = $1,620


Related Solutions

1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries...
1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end. [The following information applies to the questions displayed below.] Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2017, follows. WTI initially records prepaid expenses and unearned revenues in balance...
Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded.
Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were notrecorded.a. Office Supplies used, $800.b. Accrued service revenue, $4,000.c. Depreciation on building, $3,500.d. Prepaid Insurance expired, $650.e. Accrued salaries expense, $2,750.f. Service revenue that was collected in advance has now been earned, $130
The following three separate situations require adjusting journal entries to prepare financial statements as
Question: The following three separate situations require adjusting journal entries to prepare financial statements asof April 30. For each situation, present both:∙ The April 30 adjusting entry.∙ The subsequent entry during May to record payment of the accrued expenses.Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; PrepaidInterest; Salaries Payable; Interest Payable; Legal Services Payable; Unearned Revenue; Revenue; SalariesExpense; Interest Expense; Legal Services Expense; Depreciation Expense.a. On April 1, the company retained an attorney for a...
Stella's Bakery calculated their net income to be $100,000 before any adjusting journal entries were recorded....
Stella's Bakery calculated their net income to be $100,000 before any adjusting journal entries were recorded. What amount of net income will Stella's Bakery report after adjusting journal entries are recorded for the following transactions: Record depreciation expense of $15,000 Earned $25,000 of rent revenue that was initially recorded as unearned revenue Reclassified $10,000 of maintenance expense to a prepaid asset (represents prepaid maintenance coverage for the upcoming year) Estimated bad debt expense of $10,000; there is no beginning allowance...
Six Requirements: Prepare the journal entries and post to the T-accounts. Prepare the adjusting entries and...
Six Requirements: Prepare the journal entries and post to the T-accounts. Prepare the adjusting entries and post to the T-accounts. Prepare an adjusted trial balance. Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper formatting techniques including headings and dollar signs. Prepare the closing entries. Calculate the following measurements: Working Capital, Current Ratio, Profitability rate/percentage, Net Income Percentage. Comment with two to three sentences on how your business is performing after one month...
Six Requirements: Prepare the journal entries and post to the T-accounts. Prepare the adjusting entries and...
Six Requirements: Prepare the journal entries and post to the T-accounts. Prepare the adjusting entries and post to the T-accounts. Prepare an adjusted trial balance. Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper formatting techniques including headings and dollar signs. Prepare the closing entries. Calculate the following measurements: Working Capital, Current Ratio, Profitability rate/percentage, Net Income Percentage. Comment with two to three sentences on how your business is performing after one month...
Journalize the attached adjusting entries Prepare the necessary adjusting entries at December 31 for Staples, Inc....
Journalize the attached adjusting entries Prepare the necessary adjusting entries at December 31 for Staples, Inc. based on the information from problem 1 and the following information: 1. On November 1, 2013 the company borrowed 65,000 from a bank. The note requires principal and interest at 10% to be paid on April 30, 2014. 2. On December 1, 2013 the company received $3,000 in cash from another company that is renting office space in Staples’ building. The payment, representing rent...
Prepare an adjusted trial balance. If an amount Ledger Accounts, Adjusting Entries, Financial Statements, and Closing...
Prepare an adjusted trial balance. If an amount Ledger Accounts, Adjusting Entries, Financial Statements, and Closing Entries; Optional Spreadsheet. The unadjusted trial balance of Recessive Interiors at January 31, 2019, the end of the year, follows: Recessive Interiors Unadjusted Trial Balance January 31, 2019 Debit Balances Credit Balances 11 Cash 13,100 13 Supplies 8,000 14 Prepaid Insurance 7,500 16 Equipment 113,000 17 Accumulated Depreciation—Equipment 12,000 18 Trucks 90,000 19 Accumulated Depreciation—Trucks 27,100 21 Accounts Payable 4,500 31 Jeanne McQuay, Capital...
Prepare Journal Entries for January Activities Prepare Unadjusted Trial Balance Prepare Adjusting Entries Prepare Unadjusted Trial...
Prepare Journal Entries for January Activities Prepare Unadjusted Trial Balance Prepare Adjusting Entries Prepare Unadjusted Trial Balance Prepare Balance Sheet Prepare Income Statement Preare Statement of Cash Flows Prepare Statement of Stockholders Equity Prepare Analysis of Results The Wholesale Company began operations on January 1, 2019. During the month of January 2019, the following transactions occurred: Owners invest $50,000 cash in the corporation in exchange for 5,000 shares of common stock. Equipment is purchased for $20,000 cash. On the first...
Use the adjusting journal entry information to prepare the formal adjusting journal entries as of December...
Use the adjusting journal entry information to prepare the formal adjusting journal entries as of December 31, 2020. Remember to skip a line between each adjusting journal entry and use AJ1, AJ2, AJ3, etc, instead of the actual date. Information for Year End Adjusting Journal Entries December 31, 2020 1) The building(cost of $180,000)was purchased on January 1, 2019 and it is expected to have a useful life of 30 years with no salvage value. Depreciation expense has been recorded...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT