Exercise 3-15 (Algo) Analyzing and preparing adjusting entries LO P5

Following are two income statements for Alexis Company 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
	Unadjusted	Adjustments	Adjusted
Revenues
Services revenue	$ 24,000	a.	$ 30,000
Commissions revenue	42,500		42,500
Total revenues	$ 66,500		72,500
Expenses
Depreciation expenseComputers	0	b.	1,500
Depreciation expenseOffice furniture	0	c.	1,750
Salaries expense	12,500	d.	14,950
Insurance expense	0	e.	1,300
Rent expense	4,500		4,500
Office supplies expense	0	f.	480
Advertising expense	3,000		3,000
Utilities expense	1,250	g.	1,320
Total expenses	21,250		28,800
Net income	$ 45,250		$ 43,700

Analyze the statements and prepare the seven adjusting entries a. through g. that likely were recorded. Hint: The entry for a. refers to revenue that has been earned but not yet billed. No adjusting entry involves cash.