The Upton Company accumulates the following adjustment data at December 31.
1. Revenue of $1,100 collected in advance has been earned.
2. Salaries of $600 are unpaid.
3. Prepaid rent totalling $450 has expired.
4. Supplies of $550 have been used.
5. Revenue earned but unbilled totals $750.
6. Utility expenses of $300 are unpaid.
7. Interest of $250 has accrued on a note payable.
Instructions
a. For each of the above items indicate:
i. The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense).
ii. The account relationship (asset/liability, liability/revenue, etc.).
iii. The status of account balances before adjustment (understatement or overstatement).
iv. The accounts that will be affected.
v. The profit effect.
Prepare your answer in the tabular form presented below. The first item is shown for illustrative purposes.

b. Assume Profit before the adjustments listed above was $21,500. What is the adjusted Profit?

Question

The Upton Company accumulates the following adjustment data at December 31.
1. Revenue of $1,100 collected in advance has been earned.
2. Salaries of $600 are unpaid.
3. Prepaid rent totalling $450 has expired.
4. Supplies of $550 have been used.
5. Revenue earned but unbilled totals $750.
6. Utility expenses of $300 are unpaid.
7. Interest of $250 has accrued on a note payable.
Instructions
a. For each of the above items indicate:
i. The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense).
ii. The account relationship (asset/liability, liability/revenue, etc.).
iii. The status of account balances before adjustment (understatement or overstatement).
iv. The accounts that will be affected.
v. The profit effect.
Prepare your answer in the tabular form presented below. The first item is shown for illustrative purposes.
  
b. Assume Profit before the adjustments listed above was $21,500. What is the adjusted Profit?

Quizplus · Accepted Answer

The Answer of The Upton Company accumulates the following adjustment data at December 31.
1. Revenue of $1,100 collected in advance has been earned.
2. Salaries of $600 are unpaid.
3. Prepaid rent totalling $450 has expired.
4. Supplies of $550 have been used.
5. Revenue earned but unbilled totals $750.
6. Utility expenses of $300 are unpaid.
7. Interest of $250 has accrued on a note payable.
Instructions
a. For each of the above items indicate:
i. The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense).
ii. The account relationship (asset/liability, liability/revenue, etc.).
iii. The status of account balances before adjustment (understatement or overstatement).
iv. The accounts that will be affected.
v. The profit effect.
Prepare your answer in the tabular form presented below. The first item is shown for illustrative purposes.
  
b. Assume Profit before the adjustments listed above was $21,500. What is the adjusted Profit?

The Upton Company Accumulates the Following Adjustment Data at December