Selected account balances before adjustment for Intuit Realty at November 30, th
ID: 2609771 • Letter: S
Question
Selected account balances before adjustment for Intuit Realty at November 30, the end of the current year, follow:
Debits
Credits
Data needed for year-end adjustments are as follows:
The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.
none
X
Chart of Accounts
none
X
Journal
1. Journalize the six adjusting entries required at November 30, based on the data presented. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
1
Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13
Solution
1
Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13
Points:
Feedback
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Explanation
none
X
Final Questions
2. What would be the effect on the income statement if adjustments (b) and (e) were omitted at the end of the year?
Over/Understated
Amount
Understated
Overstated
No effect
The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life.
Understated
Overstated
No effect
Understated
Overstated
No effect
Points:
3. What would be the effect on the balance sheet if adjustments (b) and (e) were omitted at the end of the year?
Over/Understated
Amount
The contra asset account credited when recording the depreciation of a fixed asset.
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Understated
Overstated
No effect
Points:
4. What would be the effect on the “Net increase or decrease in cash” on the statement of cash flows if adjustments (b) and (e) were omitted at the end of the year? selector 1
Understated
Overstated
No effect
Points:
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Explanation
Debits
Credits
Accounts Receivable $ 75,000 Equipment 250,000 Accumulated Depreciation-Equipment $12,000 Prepaid Rent 12,000 Supplies 3,170 Wages Payable – Unearned Fees 10,000 Fees Earned 400,000 Wages Expense 140,000 Rent Expense – Depreciation Expense – Supplies Expense –Explanation / Answer
Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Supplies Expense 2,620.00 $3,170 - $550 Supplies 2,620.00 $3,170 - $550 (Record the supplies used) b. Depreciation Expense 1,675.00 Accumulated Depreciation - Equipment 1,675.00 (record the depreciation on equipment) c. Rent Expenses 8,500.00 Prepaid Rent 8,500.00 (Record the rent expenses) d. Wages Expenses 2,000.00 Wages Payable 2,000.00 (record the wages due) e. Unearned Fees 6,000.00 $10,000 - $4,000 Fees Earned 6,000.00 $10,000 - $4,000 (record the fees earned) f. Accounts Receivable 5,380.00 Fees Earned 5,380.00 (record the fees earned) Answer 2. Amount Fees Earned Understated 6,000.00 Depreciation Expenses Understated 1,675.00 Net Income Understated 4,325.00 Answer 3. Accumulated Depreciation Understated 1,675.00 Total Assets Overstated 1,675.00 Unearned Fees Overstated 6,000.00 Total Liabilities Overstated 6,000.00 Owners' Capital Understated 4,325.00 Total Liabilities & Owners' Equity Overstated 1,675.00 Answer 4. Net Increase or decrease in cash on the Statement of Cash Flow No Effect -
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