Question

CALCULATOR P Exercise 3-6 Lei Company accumulates the following adjustment data at December 31. 1. Services performed but unbilled total $1,000. 2. Supplies of $300 have been used. Utility expenses of $225 are unpaid. 4. Services performed of $260 collected in advance. 5. Salaries of $800 are unpaid. 6. Prepaid insurance totaling $350 has expired. For each of the above items indicate the following. (Enter ans phabetical order.) (a) The type of adjustment (prepaid expense, unearned revenu (b) The status of accounts before adjustment (overstatemento revenue, or accrued expense). tement).

Answer 1

Item Item 1 Type of adjustments Type of adjustments Accrued revenues Accounts before adjustments Accounts receivables Understated Service revenue understated Accounts before adju 2 Prepaid Expenses Supplies expense Understated Supplies Overstated 3 | 3 Accrued expense Accrued expense + Utilities expense Understated Utilities Payable understated Wilties papable 4 Unearned revenue Service revenue understated Unearned Service revenue overstated 5 Accrued expense Salaries expense understated Salaries Payable understated 6 Prepaid Expenses Insurance Expense understated Prepaid Insurance overstated