Reference no: EM132679988
Problem - Adjusting entries - Selected account balances before adjustment for Skylight Realty at June 30, 2012, the end of the current year, are shown below.
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Debits
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Credits
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Accounts Receivable
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$ 75,000
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Accumulated Depreciation
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$ 12,000
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Depreciation Expense
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-
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Equipment
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250,000
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Fees Earned
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400,000
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Prepaid Rent
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12,000
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Rent Expense
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-
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Supplies
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3,170
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Supplies Expense
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-
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Unearned Fees
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10,000
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Wages Expense
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140,000
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Wages Payable
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-
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Data needed for year-end adjustments are as follows:
a. Supplies on hand at June 30, $800.
b. Depreciation of equipment during year, $750.
c. Rent expired during year, $9,000.
d. Wages accrued but not paid at June 30, $1,700.
e. Unearned fees at June 30, $6,500.
f. Unbilled fees at June 30, $15,000.
Instructions -
1. Journalize the six adjusting entries required at June 30, based on the data presented.
2. What would be the effect on the income statement if adjustments (b) and (e) were omitted at the end of the year?
3. What would be the effect on the balance sheet if adjustments (b) and (e) 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 (b) and (e) were omitted at the end of the year?