Reference no: EM132679966
Problem - Adjusting entries - Selected account balances before adjustment for Newhouse Realty at March 31, 2012, the end of the current year, are as follows:
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Debits
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Credits
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Accounts Receivable
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$80,000
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Equipment
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150,000
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Accumulated Depreciation
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$28,000
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Prepaid Rent
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6,000
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Debits
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Credits
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Supplies
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$3,000
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Wages Payable
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-
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Unearned Fees
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$10,500
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Fees Earned
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410,000
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Wages Expense
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190,000
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Rent Expense
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-
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Depreciation Expense
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-
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Supplies Expense
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-
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Data needed for year-end adjustments are as follows:
a. Unbilled fees at March 31, $13,500.
b. Supplies on hand at March 31, $950.
c. Rent expired, $4,000.
d. Depreciation of equipment during year, $1,500.
e. Unearned fees at March 31, $2,500.
f. Wages accrued but not paid at March 31, $2,200.
Instructions -
1. Journalize the six adjusting entries required at March 31, based on the data presented.
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?