Susan Hatfield, certified public accountant, had the following transactions (among others) during 20X0:
1. For accurate measurement of performance and position, Hatfield uses the accrual basis of accounting. On August 1, she acquired office supplies for $3,000. Office Supplies Inventory was increased, and Cash was decreased by $3,000 on Hatfield’s books. On December 31, her inventory of office supplies was $1,300.
2. On August 1, a client gave Hatfield a retainer fee of $48,000 cash for monthly services to be rendered over the following 12 months. Hatfield increased Cash and Unearned Fee Revenue.
3. Hatfield accepted an $8,000 note receivable from a client on October 1 for tax services. The note plus interest of 6% per year was due in 6 months. Hatfield increased Note Receivable and Fee Revenue by $8,000 on October 1.
4. As of December 31, Hatfield had not recorded $800 of unpaid wages earned by her secretary during late December.
For the year ended December 31, 20X0, prepare all adjustments called for by the preceding transactions. Assume that appropriate entries were routinely made for the explicit transactions described earlier. However, no adjustments have been made before December 31. For each adjustment, prepare an analysis in the same format used when the adjustment process was explained in the chapter (i.e., the balance sheet equation format). Also prepare the adjusting journal entry.

  • CreatedFebruary 20, 2015
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