On January 31, 2012, the following data were accumulated to assist the accountant in
preparing the adjusting entries for Oceanside Realty:
a. Fees accrued but unbilled at January 31 are $10,280.
b. The supplies account balance on January 31 is $6,100. The supplies on hand at January 31 are $1,300.
c. Wages accrued but not paid at January 31 are $3,000.
d. The unearned rent account balance at January 31 is $4,500, representing the receipt of an advance payment on January 1 of three months’ rent from tenants.
e. Depreciation of office equipment is $1,400.
Instructions
1. Journalize the adjusting entries required at January 31, 2012.
2. Briefly explain the difference between adjusting entries and entries that would be
made to correct errors.
Answer:
1. a. Accounts Receivable ................................................ 10,280
Fees Earned.......................................................... 10,280
Accrued fees earned.
b. Supplies Expense...................................................... 4,800
Supplies................................................................ 4,800
Supplies used ($6,100 – $1,300).
c. Wages Expense ......................................................... 3,000
Wages Payable ..................................................... 3,000
Accrued wages.
d. Unearned Rent........................................................... 1,500
Rent Revenue ....................................................... 1,500
Rent earned ($4,500/3).
e. Depreciation Expense............................................... 1,400
Accumulated Depreciation—Equipment............ 1,400
Depreciation expense.
2. Adjusting entries are a planned part of the accounting process to update the
accounts. Correcting entries are not planned but arise only when necessary to
correct errors.
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