Selected account balances before adjustment for Atlantic Coast Realty at July 31, the end of the current year, are as follows: Debits Credits Accounts Receivable $ 79,500 Equipment 342,700 Accumulated Depreciation—Equipment $102,700 Prepaid Rent 9,300 Supplies 3,180 Wages Payable – Unearned Fees 14,100 Fees Earned 670,200 Wages Expense 329,600 Rent Expense – Depreciation Expense – Supplies Expense – Data needed for year-end adjustments are as follows: • Unbilled fees at July 31, $10,250. • Supplies on hand at July 31, $930. • Rent expired, $5,800. • Depreciation of equipment during year, $8,750. • Unearned fees at July 31, $2,100. • Wages accrued but not paid at July 31, $4,900. 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 the adjustments for unbilled fees and accrued wages were omitted at the end of the year? 3. What would be the effect on the balance sheet if the adjustments for unbilled fees and accrued wages 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 the adjustments for unbilled fees and accrued wages were omitted at the end of the year? Chart of Accounts CHART OF ACCOUNTS Alantic Coast Realty General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Rent 15 Land 16 Equipment 17 Accumulated Depreciation-Equipment LIABILITIES 21 Accounts Payable 22 Unearned Fees 23 Wages Payable 24 Taxes Payable EQUITY 31 Owner’s Equity 32 Withdrawals REVENUE 41 Fees Earned 42 Rent Revenue EXPENSES 51 Advertising Expense 52 Insurance Expense 53 Rent Expense 54 Wages Expense 55 Supplies Expense 56 Utilities Expense 57 Depreciation Expense 59 Miscellaneous Expense Journal 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. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3 4 5 6 7 8 9 10 11 12 13

Selected account balances before adjustment for Atlantic Coast Realty at July 31, the end of the current year, are as follows: Debits Credits Accounts Receivable $ 79,500 Equipment 342,700 Accumulated Depreciation—Equipment $102,700 Prepaid Rent 9,300 Supplies 3,180 Wages Payable – Unearned Fees 14,100 Fees Earned 670,200 Wages Expense 329,600 Rent Expense – Depreciation Expense – Supplies Expense – Data needed for year-end adjustments are as follows: • Unbilled fees at July 31, $10,250. • Supplies on hand at July 31, $930. • Rent expired, $5,800. • Depreciation of equipment during year, $8,750. • Unearned fees at July 31, $2,100. • Wages accrued but not paid at July 31, $4,900. 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 the adjustments for unbilled fees and accrued wages were omitted at the end of the year? 3. What would be the effect on the balance sheet if the adjustments for unbilled fees and accrued wages 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 the adjustments for unbilled fees and accrued wages were omitted at the end of the year? Chart of Accounts CHART OF ACCOUNTS Alantic Coast Realty General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Rent 15 Land 16 Equipment 17 Accumulated Depreciation-Equipment LIABILITIES 21 Accounts Payable 22 Unearned Fees 23 Wages Payable 24 Taxes Payable EQUITY 31 Owner’s Equity 32 Withdrawals REVENUE 41 Fees Earned 42 Rent Revenue EXPENSES 51 Advertising Expense 52 Insurance Expense 53 Rent Expense 54 Wages Expense 55 Supplies Expense 56 Utilities Expense 57 Depreciation Expense 59 Miscellaneous Expense Journal 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. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3 4 5 6 7 8 9 10 11 12 13

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 24CE

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Question

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

	Debits	Credits
Accounts Receivable	$ 79,500
Equipment	342,700
Accumulated Depreciation—Equipment		$102,700
Prepaid Rent	9,300
Supplies	3,180
Wages Payable		–
Unearned Fees		14,100
Fees Earned		670,200
Wages Expense	329,600
Rent Expense	–
Depreciation Expense	–
Supplies Expense	–

Data needed for year-end adjustments are as follows:

•	Unbilled fees at July 31, $10,250.
•	Supplies on hand at July 31, $930.
•	Rent expired, $5,800.
•	Depreciation of equipment during year, $8,750.
•	Unearned fees at July 31, $2,100.
•	Wages accrued but not paid at July 31, $4,900.

	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 the adjustments for unbilled fees and accrued wages were omitted at the end of the year?
3.	What would be the effect on the balance sheet if the adjustments for unbilled fees and accrued wages 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 the adjustments for unbilled fees and accrued wages were omitted at the end of the year?

Chart of Accounts

CHART OF ACCOUNTS

Alantic Coast Realty

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Supplies
14	Prepaid Rent
15	Land
16	Equipment
17	Accumulated Depreciation-Equipment

	LIABILITIES
21	Accounts Payable
22	Unearned Fees
23	Wages Payable
24	Taxes Payable

	EQUITY
31	Owner’s Equity
32	Withdrawals

	REVENUE
41	Fees Earned
42	Rent Revenue

	EXPENSES
51	Advertising Expense
52	Insurance Expense
53	Rent Expense
54	Wages Expense
55	Supplies Expense
56	Utilities Expense
57	Depreciation Expense
59	Miscellaneous Expense

Journal

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.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13

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