Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Textbook Question
Chapter 3, Problem 73PB
Record adjustments. (LO 1, 2, 3). Summit Climbing Tours has the following amounts in its records at the end of the fiscal year:
The company also has the following information available at the end of the year:
- Of the prepaid insurance, $2,000 has now expired.
- Of the unearned revenue, $2,200 has been earned.
- The company must accrue an additional $3,275 of wages expense.
- A bill for $500 from the company that provides cleaning services to Summit arrived on the last day of the year. Nothing related to this invoice has been recorded or paid.
- The company has earned an additional $750 of interest revenue, not yet received (or recorded).
Requirements
- 1. Use an
accounting equation worksheet to show the adjustments at the end of the year. - 2. Calculate the balances in each account shown after the adjustments.
- 3. Indicate whether each adjustment is related to an accrual or a deferral.
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