On May 31, the following data were accumulated to assist the accountant in prepa

Question

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

Chart of Accounts

a. Fees accrued but unbilled at May 31 are $19,750. b. The supplies account balance on May 31 is $12,300. The supplies on hand at May 31 are $4,150. c. Wages accrued but not paid at May 31 are $2,700. d. The unearned rent account balance at May 31 is $9,000, representing the receipt of an advance payment on May 1 of three months’ rent from tenants. e. Depreciation of office equipment is $3,200.

Explanation / Answer

General Journal Debit Credit Accounts Receivable $19,750 Fees Earned $19,750 Accrued fees earned. Supplies Expense 8150 Supplies 8150 Supplies used ($12300 – $4150). Wages Expense 2700 Wages Expens 2700 Accrued wages. Unearned Rent 3000 Rent Revenue 3000 Rent earned ($9000/3) Depreciation Expense 3200 Accumulated Depreciation—Equipment 3200 Depreciation expense. Adjusting Entries Adjusting entries are a planned part of the accounting process to update the accounts. Correcting entries Correcting entries are not planned but arise only when necessary to correct errors.

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