On March 31, the following data were accumulated to assist the accountant in pre

Question

On March 31, the following data were accumulated to assist the accountant in preparing the adjusting entries for Potomac Realty:

Chart of Accounts

Journal

1. Journalize the adjusting entries required on March 31. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

1

Adjusting Entries

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Final Question

2. What is the difference between adjusting entries and correcting entries?

Both adjusting entries and correcting entries are a planned part of the accounting process.

Both adjusting entries and correcting entries are not a planned part of the accounting process.

Adjusting entries are a planned part of the accounting process, correcting entries are not planned but arise when necessary to correct errors.

• The supplies account balance on March 31 is $5,925, the supplies on hand on March 31 are $1,275. • The unearned rent account balance on March 31 is $5,200 representing the receipt of an advance payment on March 1 of four months’ rent from tenants. • Wages accrued but not paid at March 31 are $2,320. • Fees accrued but unbilled at March 31 are $18,220. • Depreciation of office equipment is $4,350. CSeoure htt:/2.cengsqenow . EX03-1 3 EX03-03 BLANKSHEETAL LXOJ-U LILANKSILLIAL narts & EX03-19ALGO 9 EX03 21 ALGO 10. EX03-26.BLANKSHEETA Ponomac Realty 14. PROJ 0SALGO 11 Cu 51 Advetiing Expens2 21 Acaunts Payable 56 Uai ses Epense O lype hene to search 9170013

Explanation / Answer

Solution 1:

Solution 2:

Adjusting entries are a planned part of the accounting process, correcting entries are not planned but arise when necessary to correct errors.

Adjusting Journal Entries - Potomac Reality Event Date Particulars Debit Credit Assets Liabilities Equity 1 31-Mar Supplies Expense Dr ($5,925 - $1,275) $4,650.00 -$4,650.00        To Supplies $4,650.00 -$4,650.00 (To record supplies expense) 2 31-Mar Unearned rent Dr $1,300.00 -$1,300.00        To Rent revenue ($5,200/4) $1,300.00 $1,300.00 (To record rent revenue) 3 31-Mar Wages expense Dr $2,320.00 -$2,320.00        To Wages Payable $2,320.00 $2,320.00 (To record wages accrued) 4 31-Mar Accrued revenue Dr $18,220.00 $18,220.00        To Fees earned $18,220.00 $18,220.00 (To record accrued revenue) 5 31-Mar Depreciation expense Dr $4,350.00 -$4,350.00        To Accumulated depreciation - Office equipment $4,350.00 -$4,350.00

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