Moteki Company accumulates the following adjustment data at December 31.

Indicate the type of adjustment (prepaid expenses, accrued revenues and so on), and the status of
accounts before adjustment (overstated or understated). (Enter answers in alphabetical order.)
1.

Supplies of $100 are on hand.

2.

Services provided but not recorded total $900.

3.

Interest of $200 has accumulated on a note payable.

4.

Rent collected in advance totaling $650 has been earned.

Item

Type of Adjustment

1.

Accrued Revenues

2.

Unearned Revenues

3.

Accrued Revenues

4.

Accrued Revenues

Account Balances before Adjustment

Revenues Understated

EAT_1347530273 Assets Understated

Revenues Overstated

Assets Understated

Primo Industries collected $105,000 from customers in 2014. Of the amount collected, $25,000 was
from services performed in 2013. In addition, Primo performed services worth $40,000 in 2014, which
will not be collected until 2015.
Primo Industries also paid $72,000 for expenses in 2014. Of the amount paid, $30,000 was for
expenses incurred on account in 2013. In addition, Primo incurred $42,000 of expenses in 2014,
which will not be paid until 2015.
(a) Compute 2014 cash-basis net income.
Cash-basis net income

(b) Compute 2014 accrual-basis net income.

Accrual-basis net income

Lei Company accumulates the following adjustment data at December 31.

1.
2.
3.
4.
5.
6.

Services provided but not recorded total $1,000.

Supplies of $300 have been used.
Utility expenses of $225 are unpaid.
Services related to Unearned service revenue of $260 were performed
Salaries of $800 are unpaid.
Prepaid insurance totaling $350 has expired.

For each of the above items indicate the following. (Enter answers in alphabetical order.)
(a)
(b
)

The type of adjustment (prepaid expenses, unearned revenues, accrued revenues, or accrued
expenses).
The status of accounts before adjustment (overstatement or understatement).

Item
1.

2.

3.

4.

5.

6.

Type of Adjustment

Accounts before Adjustment

The trial balances before and after adjustment for Frinzi Company at the end of its fiscal year are
presented below.
FRINZI COMPANY
Trial Balance
August 31, 2014
Before
Adjustment
Dr.
Cash

After
Adjustment

Cr.

Dr.

$10,400

$10,400

Accounts Receivable

8,800

10,800

Supplies

2,300

900

Prepaid Insurance

4,000

2,500

Equipment

14,000

Accumulated DepreciationEquipment
Accounts Payable
Salaries and Wages Payable
Unearned Rent Revenue

Cr.

14,000
$ 3,600

$ 4,500

5,800

5,800

1,100

1,500

600

Owners Capital

15,600

15,600

Service Revenue

34,000

36,000

Rent Revenue

11,000

11,900

Salaries and Wages Expense

17,000

18,100

1,400

15,000

15,000

1,500

Supplies Expense
Rent Expense
Insurance Expense
Depreciation Expense

0
$71,500

900
$71,500

$75,500

$75,500

Prepare the adjusting entries that were made. (Credit account titles are automatically indented
when the amount is entered. Do not indent manually.)
Date

Account Titles and Explanation

Aug. 31

(To record accrued revenue)

Debit

Credit

Aug. 31

(To record supplies used)

Aug. 31

(To record expired insurance)

Aug. 31

(To record depreciation)

Aug. 31

(To record accrued salaries)

Aug. 31