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2. 

Following are two income statements. for the year ended December 31. The left number column is prepared

before adjusting entries are recorded, and the right column is prepared after adjusting entries. The company records cash receipts and payments related to unearned and prepaid items in balance sheet accounts.

 

Income Statements

For Year Ended December 31

adjusted  Un-adjusted 

Revenues       $28,800 $24,000

Fees earned    Commissions earned  42,500 42,500  

 

Total revenues 71,300 $66,500   


Expenses     

 Depreciation expense—Computers  0    1,200

Depreciation expense—Office furniture  0    1,400

Salaries expense  12,500    14,460

Insurance expense  0    1,040

Rent expense  4,500    4,500

Office supplies expense  0    384

Advertising expense  3,000    3,000

Utilities expense  1,250    1,306


Total 21,250    27,290

Net income $45,250   $44,010

 

Analyze the statements and make the seven adjusting entries that likely were recorded. Hint: Entry for a refers to fees that have been earned but not yet billed. None of the entries involve cash.

Top Answer

1.Accounts Receivable = 28,800-24,000 = 4,800... View the full answer

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