Mastery Problem: The Adjusting Process.

Unadjusted Financial Statements

These financial statements were prepared from the unadjusted trial balance.

Cole Designs Inc.
Income Statement
For the Year Ended December 31, 20Y3
Fees earned	$70,200
Wages expense	(44,900)
Net income	$25,300

Cole Designs Inc.
Balance Sheet
December 31, 20Y3
Assets
Cash			$5,750
Accounts receivable			32,400
Supplies			3,500
Prepaid insurance			3,800
Office equipment			11,000
Total assets			$56,450
Liabilities
Unearned fees			$8,000
Stockholders Equity
Common stock	$12,000
Retained earnings	36,450		48,450
Total liabilities and stockholders equity			$56,450

Adjusted Financial Statements

These financial statements were prepared from the adjusted trial balance.

Cole Designs Inc.
Income Statement
For the Year Ended December 31, 20Y3
Fees earned			$76,400
Expenses:
Wages expense	$46,600
Supplies expense	3,420
Insurance expense	2,500
Depreciation expense	1,500
Total expenses			(54,020)
Net income			$22,380

Cole Designs Inc.
Balance Sheet
December 31, 20Y3
Assets
Cash				$5,750
Accounts receivable				33,200
Supplies				80
Prepaid insurance				1,300
Office equipment	$11,000
Accumulated depreciation-office equipment	(1,500)			9,500
Total assets				$49,830
Liabilities
Wages payable				$1,700
Unearned fees				2,600
Total liabilities				$4,300
Stockholders Equity
Common stock	$12,000
Retained earnings	33,530			45,530
Total liabilities and stockholders' equity				$49,830

Adjusting Entries

Journalize the six December 31 adjusting entries for Cole Designs Inc. that adjusted the accounts to arrive at the financial statements in the Adjusted Financial Statements panel. If an amount box does not require an entry, leave it blank.

Dec. 31	Accounts Receivable
	Fees Earned
Dec. 31	Supplies Expense	3,420
	Supplies		3,420
Dec. 31	Insurance Expense
	Prepaid Insurance
Dec. 31	Depreciation Expense
	Accumulated Depreciation-Office Equipment
Dec. 31	Wages Expense	1,700
	Wages Payable		1,700
Dec. 31	Unearned Fees
	Fees Earned