JT's Grill, an upscale restaurant on the beach, has just completed its first full year of operations on December 31. It provides meals both in its restaurant and catering. Selected balances before year-end adjustments follow.

An analysis of the firm's records reveals the following:
a. The balance in Prepaid Advertising represents the amount paid for newspaper advertising for 1 year. The agreement, which calls for the same amount of space each month, covers the period from February 1 of the current year to January 31 of the following year. JT's Grill did not advertise during its first month of operations.
b. Equipment purchased January 1, has an estimated life of eight years.
c. Utilities expense does not include the expense for December, estimated at $600. The bill will not arrive until January of the following year.
d. At year-end, employees have earned $6,200 in wages that will not be paid until January.
e. Supplies available at year-end amounted to $650.
f. At year-end, unpaid interest of $200 has accrued on the notes payable.
Determine the financial statement effect of the above adjustments using the following format. Next to each transaction in the column of the respective account classification, write the 1) name of each account affected by the transaction, and 2) the dollar amount and direction of the effect on Assets, Liabilities, Equity, Revenues and Expenses, for each of the adjustments necessary at the end of December:

Question

JT's Grill, an upscale restaurant on the beach, has just completed its first full year of operations on December 31. It provides meals both in its restaurant and catering. Selected balances before year-end adjustments follow. 
  
An analysis of the firm's records reveals the following:
a. The balance in Prepaid Advertising represents the amount paid for newspaper advertising for 1 year. The agreement, which calls for the same amount of space each month, covers the period from February 1 of the current year to January 31 of the following year. JT's Grill did not advertise during its first month of operations.
b. Equipment purchased January 1, has an estimated life of eight years.
c. Utilities expense does not include the expense for December, estimated at $600. The bill will not arrive until January of the following year.
d. At year-end, employees have earned $6,200 in wages that will not be paid until January.
e. Supplies available at year-end amounted to $650.
f. At year-end, unpaid interest of $200 has accrued on the notes payable.
Determine the financial statement effect of the above adjustments using the following format. Next to each transaction in the column of the respective account classification, write the 1) name of each account affected by the transaction, and 2) the dollar amount and direction of the effect on Assets, Liabilities, Equity, Revenues and Expenses, for each of the adjustments necessary at the end of December:

Quizplus · Accepted Answer

The Answer of JT's Grill, an upscale restaurant on the beach, has just completed its first full year of operations on December 31. It provides meals both in its restaurant and catering. Selected balances before year-end adjustments follow. 
  
An analysis of the firm's records reveals the following:
a. The balance in Prepaid Advertising represents the amount paid for newspaper advertising for 1 year. The agreement, which calls for the same amount of space each month, covers the period from February 1 of the current year to January 31 of the following year. JT's Grill did not advertise during its first month of operations.
b. Equipment purchased January 1, has an estimated life of eight years.
c. Utilities expense does not include the expense for December, estimated at $600. The bill will not arrive until January of the following year.
d. At year-end, employees have earned $6,200 in wages that will not be paid until January.
e. Supplies available at year-end amounted to $650.
f. At year-end, unpaid interest of $200 has accrued on the notes payable.
Determine the financial statement effect of the above adjustments using the following format. Next to each transaction in the column of the respective account classification, write the 1) name of each account affected by the transaction, and 2) the dollar amount and direction of the effect on Assets, Liabilities, Equity, Revenues and Expenses, for each of the adjustments necessary at the end of December:

JT's Grill, an Upscale Restaurant on the Beach, Has Just