80.2K

Verified Solution

Link Copied!

Selected account balances before adjustment for Alantic Coast Realty at July 31, 2016, the end of the current year, are as follows: Debits Credits (debits) Accounts Receivable $ 75,000 (debits) Equipment 345,700 (credit) Accumulated DepreciationEquipment $112,500 (debits) Prepaid Rent 9,000 (debits) Supplies 3,350 (credit) Wages Payable (credit) Unearned Fees 12,000 (credit) Fees Earned 660,000 (debits) Wages Expense 325,000 Rent Expense Depreciation Expense Supplies Expense Data needed for year-end adjustments are as follows: a. Unbilled fees at July 31, $11,150. b. Supplies on hand at July 31, $900. c. Rent expired, $6,000. d. Depreciation of equipment during year, $8,950. e. Unearned fees at July 31, $2,000. f. Wages accrued but not paid at July 31, $4,840. Required: 1. Journalize the six adjusting entries required at July 31, based on the data presented. Refer to the Chart of Accounts for exact wording of account titles. 2. What would be the effect on the income statement if adjustments (a) and (f) were omitted at the end of the year? 3. What would be the effect on the balance sheet if adjustments (a) and (f) were omitted at the end of the year? 4. What would be the effect on the Net increase or decrease in cash on the statement of cash flows if adjustments (a) and (f) were omitted at the end of the year?

Answer & Explanation Solved by verified expert

See Answer