Dawn Drain has employed you to investigate whether any accrual entries are needed in her gutter cleaning
Question:
Dawn Drain has employed you to investigate whether any accrual entries are needed in her gutter cleaning business. On completion of your investigation on 30 June, you have discovered that the following items need attention.
1. Unearned cleaning services revenue now earned, $5200 2. Depreciation not recorded, $13 000 3. Employee salaries owed but not recorded, $2500 4. Prepaid insurance expired, $600 5. Interest revenue accrued but not recorded, $310 Required
(a) Prepare the adjusting entries for items 1 to 5 at 30 June, the end of the accounting period.
(b) Suppose the adjusting entries in requirement
(a) were not made. Calculate the total overstatement or understatement of profit as a result of the omission of these adjustments.
Step by Step Answer:
Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie