Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
SOLUTION
Requirement 1
P3-33A, cont.
Requirement 2
P3-34A Journalizing adjusting entries and identifying the impact on
financial statements
Learning Objectives 3, 5
e. On October 1, Griffin received $9,000 prepayment for a deep-sea fishing charter to take
place in December. As of December 31, Griffin has completed the charter.
Requirements
1. Journalize the adjusting entries needed on December 31 for Griffin Fishing Charters.
Assume Griffin records adjusting entries only at the end of the year.
2. If Griffin had not recorded the adjusting entries, indicate which specific category of
accounts on the financial statements would be misstated and if the misstatement is
overstated or understated. Use the following table as a guide.
SOLUTION
Requirement 1
P3-34A, cont.
d:
Requirement 2
P3-35A Journalizing and posting adjustments to the T-accounts and preparing an adjusted
trial balance
Learning Objectives 3, 4
3. Adjusted trial balance total $75,600
The unadjusted trial balance of Anniston Air Purification System at December 31, 2018, and the
data needed for the adjustments follow.
Adjustment data at December 31 follow:
a. On December 15, Anniston contracted to perform services for a client receiving $3,100 in
advance. Anniston recorded this receipt of cash as Unearned Revenue. As of December 31,
Anniston has completed $2,100 of the services.
b. Anniston prepaid two months of rent on December 1. (Assume the Prepaid Rent balance as
shown on the unadjusted trial balance represents the two months of rent prepaid on December
1.)
c. Anniston used $750 of office supplies.
d. Depreciation for the equipment is $850.
e. Anniston received a bill for December’s online advertising, $1,100. Anniston will not pay the
bill until January. (Use Accounts Payable.)
f. Anniston pays its employees on Monday for the previous week’s wages. Its employees earn
$3,500 for a five-day workweek. December 31 falls on Wednesday this year.
g. On October 1, Anniston agreed to provide a four-month air system check (beginning October
1) for a customer for $3,400. Anniston has completed the system check every month, but
payment has not yet been received and no entries have been made.
Requirements
1. Journalize the adjusting entries on December 31.
2. Using the unadjusted trial balance, open the T-accounts with the unadjusted balances.
Post the adjusting entries to the T-accounts.
3. Prepare the adjusted trial balance.
4. How will Anniston Air Purification System use the adjusted trial balance?
SOLUTION
Requirement 1
P3-35A, cont.
P3-35A, cont.
Requirement 2
P3-35A, cont.
Requirement 3
