Ellis Ltd accumulates the following adjustment data at 31 December.
1. Revenue of $800 collected in advance has now 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 not yet invoiced totals $750.
6. Electricity expenses of $200 are unpaid.
7. Interest of $250 has accrued on a note payable.
(a) For each of the above items indicate:
1. the type of adjustment (prepaid expense, revenue received in advance, accrued revenue, or accrued expense)
2. the account relationship (asset/liability, liability/revenue, etc.)
3. the status of account balances before adjustment (understatement or overstatement)
4. the adjusting entry.
(b) Assume profit before the adjustments listed above was $16,500. What is the adjusted profit?
Prepare your answer in the tabular form presented below.

Question

Ellis Ltd accumulates the following adjustment data at 31 December.
1. Revenue of $800 collected in advance has now 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 not yet invoiced totals $750.
6. Electricity expenses of $200 are unpaid.
7. Interest of $250 has accrued on a note payable.
(a) For each of the above items indicate:
 1. the type of adjustment (prepaid expense, revenue received in advance, accrued revenue, or accrued expense)
 2. the account relationship (asset/liability, liability/revenue, etc.)
 3. the status of account balances before adjustment (understatement or overstatement)
 4. the adjusting entry.
(b) Assume profit before the adjustments listed above was $16,500. What is the adjusted profit?
Prepare your answer in the tabular form presented below.

Quizplus · Accepted Answer

The Answer of Ellis Ltd accumulates the following adjustment data at 31 December.
1. Revenue of $800 collected in advance has now 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 not yet invoiced totals $750.
6. Electricity expenses of $200 are unpaid.
7. Interest of $250 has accrued on a note payable.
(a) For each of the above items indicate:
 1. the type of adjustment (prepaid expense, revenue received in advance, accrued revenue, or accrued expense)
 2. the account relationship (asset/liability, liability/revenue, etc.)
 3. the status of account balances before adjustment (understatement or overstatement)
 4. the adjusting entry.
(b) Assume profit before the adjustments listed above was $16,500. What is the adjusted profit?
Prepare your answer in the tabular form presented below.

Ellis Ltd Accumulates the Following Adjustment Data at 31 December