What would be the effect on the balance sheet if adjustments

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Selected account balances before adjustment for Alantic Coast Realty at July 31, 2016, the end of the current year, are as follows:

 

Debits

Credits

Accounts Receivable

$75,000

 

Equipment

345,700

 

Accumulated Depreciation—Equipment

 

$112,500

Prepaid Rent

9,000

 

Supplies

3,350

 

Wages Payable

 

Unearned Fees

 

12,000

Fees Earned

 

660,000

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? 

Reference no: EM13987322

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