Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 60

Adjusting entries
Reliable Repairs Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:

For preparing the adjusting entries, the following data were assembled:
• Fees earned but unbilled on April 30 were $9,850.
• Supplies on hand on April 30 were $4,660.
• Depreciation of equipment was estimated to be $6,470 for the year.
• The balance in unearned fees represented the April 1 receipt in advance for services to be provided. During April, $15,000 of the services were provided.
• Unpaid wages accrued on April 30 were $5,200.
Instructions
1. Journalize the adjusting entries necessary on April 30, 2018.
2. Determine the revenues, expenses, and net income of Reliable Repairs Service before the adjusting entries.
3. Determine the revenues, expense, and net income of Reliable Repairs Service after the adjusting entries.
4. Determine the effect of the adjusting entries on Retained Earnings.