[leolongi]

At December 31, 2007, the accountant at Puget Sounds, a recording studio, has entered all the firm's transactions into the accounting system and is beginning the end-of-period process. He asks you help in identifying the necessary adjusting entries. In the first column on page 120, the accountant has listed the company's account balances before considering adjustments. In addition, he has provided other information that may cause you to recommend that certain adjusting entries be made.

1. $4,350 of wages earned by employees during December have not been recorded or paid.
2. The prepaid insurance is for a 3-year policy purchased on the first day of the year just ending.
3. Unearned revenues are for contracts for the use of studio facilities. $12,000 of this amount has been earned by December 31.
4. A count at year-end show that $10,050 of supplies remain on hand.
5. The not payable was issued on October 1, 2007. Interest accumulates in the amount of $3,000 per month. Interest has not been recorded for December.
6. Depreciation on equipment is $1,500 per month. Depreciation on buildings is $600 per month. No depreciation has yet been recorded for the quarter ( 3 months) just ended.

Required

A. Identify any adjustments you believe necessary and enter their effects in the adjustments column of the table above. Code each adjustment with the number to which it relates. The first item is completed for you as an example.
B. Record the proper ending amount for each account in the final column.
C. On the table you have completed, why doesn't the total of all asset accounts equal the total of all liability and equity accounts?
D. What additional step(s) needs to be performed before financial statements can be prepared? Explain how this will solve the imbalance identified in part (C) above.
E. By what amount (and percentage) would net income have been misstated if no adjusting entries had been recorded by this company?

[Curlyben]

Thank you for taking the time to copy your homework to AMHD.
Please refer to this announcement: https://www.askmehelpdesk.com/financ...-b-u-font.html

[pready]

First thing you should do is set-up a worksheet with all your account balances for the trial balance. Next you need to do adjusting entries for items #1 thru#6. After this you will need to do an adjusted trial balance. This will take care of Item A and B.

For item C you will need to transfer your Asset, Liability, and Equity accounts to the Balance sheet columns of the worksheet.

Your Assets will not equal laibilities and Equity because you will have to compute net Income which will flow through to Retained Earnings.

For Item d you will need to transfer your accounts to the Income Statement and Balance Sheet columns, calculate Net Income and transfer it to the balance sheet.

For Item E you will neet to calculate Net Income before and after the adjustments, then calculate the difference as well as the percentage.