Step 4. Assembling and Analyzing Adjustment Data

Before the financial statements can be prepared, the accounts must be updated. The four types of accounts that normally require adjustment include prepaid expenses, unearned revenue, accrued revenue, and accrued expenses. In addition, depreciation expenses must be recorded for fixed assets other than land. The following data have been assembled on April 30, 20Y8, for analysis of possible adjustments for Kelly Consulting:

1. Insurance expired during April is $300.

2. Supplies on hand on April 30 are $1,350.

3. Depreciation of office equipment for April is $330.

4. Accrued receptionist salary on April 30 is $120.

1. Rent expired during April is $1,600.

2. Unearned fees on April 30 are $2,500.