E3-30B. (Learning Objectives 1, 3: Explain how accrual accounting differs from cash-basis LO 1, 3accounting; adjust the accounts) An accountant made the following adjustments atDecember 31, the end of the accounting period:a. Prepaid insurance, beginning, $400. Payments for insurance during the period, $2,100.Prepaid insurance, ending, $600.b. Interest revenue accrued, $2,400.c. Unearned service revenue, beginning, $1,700. Unearned service revenue, ending, $400.d. Depreciation on building, $5,300.e. Employees’ salaries owed for two days of a five-day work week; weekly payroll, $21,000.f. Income before income tax, $30,000. Income tax rate is 35%.Requirements1. Journalize the adjusting entries.2. Suppose the adjustments were not made. Calculate the overall overstatement or understatement of net income resulting from the omission of these adjustments
E3-30B. (Learning Objectives 1, 3: Explain how accrual accounting differs from cash-basis LO 1, 3
accounting; adjust the accounts) An accountant made the following adjustments at
December 31, the end of the accounting period:
a. Prepaid insurance, beginning, $400. Payments for insurance during the period, $2,100.
Prepaid insurance, ending, $600.
b. Interest revenue accrued, $2,400.
c. Unearned service revenue, beginning, $1,700. Unearned service revenue, ending, $400.
d.
e. Employees’ salaries owed for two days of a five-day work week; weekly payroll, $21,000.
f. Income before income tax, $30,000. Income tax rate is 35%.
Requirements
1. Journalize the
2. Suppose the adjustments were not made. Calculate the overall overstatement or understatement of net income resulting from the omission of these adjustments
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