Question

Mitchell Fishing Charters has collected the following data for the December 31 adjusting entries

Score: 0 of 1 pt 5 of 5 (3 IIN Score: 52.45%, 26201 5 pls P3-34A (similar to) Michell Fishing Charters has collected the foliiwing data for t the December 31 adusing entries Cick the icon to view the data ) Read the rsouesmsnta Requirement 1. Joumalice the adjueing entries needed on December 31 for Milchel Fihing Charters Assoume Mtchel records adusting enbies only at he end ot he year. (Record debits first then credits. Selkct the explanasen on the last ina of the jpurnal entry table a. The company recelved its clectric bil on Dacombes 20 for $325 but will not pay t unil January 5. (Use the Usiliies Payable accosunt) Dato Accounts and Explanation Debit Credit (a) Dec: 31uStiles Expense Choose tom any ist or enmer any number in the input helds and then cick Check Answer Clear Al remaining Order 37479170 ..pdt earch

Score: 5 to) s has colled ow the data Mce Inilo a. The company received is electric bill on Decomber 20 for $325 but will not b. Mitdheill purchased a sae-moeth boat irsurance policy on November 1 for c. As ol December 31, Milchell had earned $5,000 of charter revenae that has d. Miches fishing beat was purchased on January 1 at a cest of $47,50D alice the ad st, then credt pay it unlil January 5 (Use the Utilities Payable account ) usting entries c ed lts electric $1,800 Mtchl ecorded a debł to Prepaid Iinesurance nt.) not boen recorded or received ies Expense Mitchell expects to use the boat for five years and that t wil have a residual vakue of $2.500 Determine annual depreciation assuming the straight ine depreciation method is used e On Octobers 1, Mitchel recaived 53,000 prepayment for a desp-sea fishing charter to take place in December. Aa of December 31, Mitchell has cormplobed the charter t or enter ary d Print Done Check Ansm 7479170 pdf

t has collected the following data for the December 31 adjusting entries w the data.) ze the adju t, then credit usting ent d its electric 1. Journalice the adjusting entries needed on December 31 for Mtchell Fishing Charters Assume Mitchell records adjusting entries only at the end of the year 2. If Mitchell had not recorded the adjusting entries, indicate which specific es Expense category of accounts on the financial statements would be misstated and if the misstiatement is overstated or understated Print Done or enter any number in the input fields and then cick Check Answer Clear Al 7479170-pd

Answer 1

1. Adjusting Journal Entries

	Account Title	Debit	Credit
a	Utilities expense	325
	Utilities payable		325
b	Insurance expense (1800 x 2/6)	600
	Prepaid insurance		600
c	Accounts receivable	5000
	Revenue-Charter		5000
d	Depreciation expense ($ 47,500-$2,500) / 5 years	9000
	Accumulated depreciation		9000
e	Customer deposit	3000
	Revenue-Charter		3000

2. If Mitchell not recorded the adjusting entries Net income of the current year will be overstated by $ 1,925.

"Retained earnings/Income summary" on the financial statements will be overstated $ 1,925, Because This excess amount not reduced from "Retained earnings/ Income summary".

Revenue (i)	8000
Expenses:
Utilities expense	325
Insurance expense	600
Depreciation expense	9000
Total Expenses (ii)	9925
Excess expenses more than the revenue (i-ii)	1925