VanBrush Enterprises, a painting contractor, prepared the following adjusting entries at year-end:

Required:
1. Show the effect of these adjustments on
(1) Assets, liabilities, and equity
(2) Revenues, expenses, and net income.
2. If these adjustments were made with estimates that were considered conservative, how would this affect your interpretation of earnings quality?

Transcribed Image Text:

2,550 8,110 5,245 3,820 a. Wages Expense Wages Payable Service Revenue Service Revenuc Prepaid Rent 2,550 8,110 5,245 3,820 b. Accounts Reccivable nu d. Rent Expense