Following are two income statements for Alexis Co. for the year ended December 3
ID: 2335342 • Letter: F
Question
Following are two income statements for Alexis Co. for the year ended December 31. The left number column is prepared before any adjusting entries are recorded, and the right column includes the effects of adjusting entries. The company records cash receipts and payments related to unearned and prepaid items in balance sheet accounts. The middle column shows a blank space for each income statement effect of the eight adjusting entries a through g (the balance sheet part of the entries is not shown here).
Analyze the statements and prepare the eight adjusting entries a through g that likely were recorded. Note: Answer for a has two entries 30% of (i) the $6,000 adjustment for Fees Earned has been earned but not billed, and (ii) the other 70% has been earned by performing services that were paid for in advance.
a1. Record the adjusting entry for accrued revenues
a2.Record the adjusting entry related to fees collected in advance.
b.Record depreciation on computers.
c.Record depreciation on office furniture.
d.Record the adjusting entry related to salaries.
e.Record the adjusting entry related to insurance.
f.Record the adjusting entry related to office supplies.
g.Record the adjusting entry related to utilities.
find general journal, debit, credit
Income Statements
For Year Ended December 31 Unadjusted Adjustments Adjusted Revenues Fees earned $ 24,000 a. $ 30,000 Commissions earned 42,500 42,500 Total revenues $ 66,500 72,500 Expenses Depreciation expense—Computers 0 b. 1,500 Depreciation expense—Office furniture 0 c. 1,750 Salaries expense 12,500 d. 14,950 Insurance expense 0 e. 1,300 Rent expense 4,500 4,500 Office supplies expense 0 f. 480 Advertising expense 3,000 3,000 Utilities expense 1,250 g. 1,320 Total expenses 21,250 28,800 Net income $ 45,250 $ 43,700
Explanation / Answer
Adjusting entry :
Transaction Account and explanation debit credit a1 Account receivable (6000*30%) 1800 Fees earned 1800 (To record revenue) a2 Unearned revenue (6000*70%) 4200 Fees earned 4200 (To record revenue) b Depreciation expense -Computer 1500 Accumlated depreciation-computer 1500 (To record depreciation) c Depreciation expense-Office furniture 1750 Accumlated depreciation-office furniture 1750 (To record depreciation) d Salary expense 2450 Salary payable 2450 (To record accured salary) e Insurance expense 1300 Prepaid insurance 1300 (To record insurance expense) f Office supplies expense 480 Office supplies 480 (To record supplies adjusted) g Utilities expense 70 Utilities payable 70 (To record utilities expense)