The trial balance of David Advertising at December 31, 2014 before adjustments and the data needed...

 

Transcribed Image Text:

The trial balance of David Advertising at December 31, 2014 before adjustments and the data needed for the month-end adjustments follow (the accounting period is one month): Cash Accounts Receivable Supplies Prepaid Insurance David Advertising Trial Balance December 31, 2014 Account Title, Adjustment data: Equipment Accumulated Depreciation - Equipment Accounts Payable- Notes Payable Unearned Revenue Owner's, Capital Owner's, Drawings Service Revenue Salaries Expense Rent Expense Dr. $7,600 8,400 4,700 3,600 24,000 Cr. $6,500 4,400 9,000 3,600 20,000 2,500 5,200 PISSING 1,500 $57,500 $57,500 14,000 1. The remaining supplies at December 31 are $1,500. 2. The insurance policy was purchased on December 1 for one year. 3. The equipment is depreciated at the rate of $500 per month. 4. The notes payable represent a 3-month, 10% note that was signed on 5. December 1. $2,000 of the unearned service revenue has been earned at the end of December. 6. Salaries of $1,800 are accrued at December 31. 7. Invoices representing $1,600 of services performed during December have not been recorded as of December 31. Instructions: Adj. No. 1 2 3 4 5 6 7 1. Journalize the adjusting entries for David Advertising at December 31. 2. If the adjusting entries number 1 to 7 are not made. Indicate the effect on net income (understatement or overstatement and by how much) of not making each of those adjustments. Also, indicate the effect on assets or liabilities of not making each of those adjustments. Answer this part by filling the following table: Effect on Net Income Effect on Assets Effect on Liabilities The trial balance of David Advertising at December 31, 2014 before adjustments and the data needed for the month-end adjustments follow (the accounting period is one month): Cash Accounts Receivable Supplies Prepaid Insurance David Advertising Trial Balance December 31, 2014 Account Title, Adjustment data: Equipment Accumulated Depreciation - Equipment Accounts Payable- Notes Payable Unearned Revenue Owner's, Capital Owner's, Drawings Service Revenue Salaries Expense Rent Expense Dr. $7,600 8,400 4,700 3,600 24,000 Cr. $6,500 4,400 9,000 3,600 20,000 2,500 5,200 PISSING 1,500 $57,500 $57,500 14,000 1. The remaining supplies at December 31 are $1,500. 2. The insurance policy was purchased on December 1 for one year. 3. The equipment is depreciated at the rate of $500 per month. 4. The notes payable represent a 3-month, 10% note that was signed on 5. December 1. $2,000 of the unearned service revenue has been earned at the end of December. 6. Salaries of $1,800 are accrued at December 31. 7. Invoices representing $1,600 of services performed during December have not been recorded as of December 31. Instructions: Adj. No. 1 2 3 4 5 6 7 1. Journalize the adjusting entries for David Advertising at December 31. 2. If the adjusting entries number 1 to 7 are not made. Indicate the effect on net income (understatement or overstatement and by how much) of not making each of those adjustments. Also, indicate the effect on assets or liabilities of not making each of those adjustments. Answer this part by filling the following table: Effect on Net Income Effect on Assets Effect on Liabilities

Answer rating: 100% (QA)

Journalize the adjusting entries for David Advertising at December 31 Supplies Adjustment Debit Sup... View the full answer