REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available. Accounts Unadjusted Trial Balance Adjusted Trial Balance Debit Credit Debit Credit Cash 13,000 13,000 Accounts Receivable 1,500 1,800 Prepaid Insurance 600 200 Supplies 3,800 3,000 Machines 30,000 30,000 Accumulated Depreciation 12,000 17,500 Wages Payable 900 Unearned Fees 6,700 6,500 Owner's Capital 24,000 24,000 Owner's Drawing 4,800 4,800 Fees Earned 25,000 25,500 Wages Expense 14,000 14,900 Depreciation Expense 5,500 Supplies Expense 800 Insurance Expense 400 67,700 67,700 74,400 74,400 Required: a. Reconstruct the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles. b. What is the amount of net income?

Question

Business

Mina Cochran

26 October, 16:16

REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31. The following trial balances are available. Accounts Unadjusted Trial Balance Adjusted Trial Balance Debit Credit Debit Credit Cash 13,000 13,000 Accounts Receivable 1,500 1,800 Prepaid Insurance 600 200 Supplies 3,800 3,000 Machines 30,000 30,000 Accumulated Depreciation 12,000 17,500 Wages Payable 900 Unearned Fees 6,700 6,500 Owner's Capital 24,000 24,000 Owner's Drawing 4,800 4,800 Fees Earned 25,000 25,500 Wages Expense 14,000 14,900 Depreciation Expense 5,500 Supplies Expense 800 Insurance Expense 400 67,700 67,700 74,400 74,400 Required: a. Reconstruct the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles. b. What is the amount of net income?

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Net Income 3900

Explanation:

REM Consulting

Un adjusted Trial Balance Adjusted Trial Balance

Debit Credit Debit Credit

Cash 13,000 13,000

Accounts Receivable 1,500 1,800

Prepaid Insurance 600 200

Supplies 3,800 3,000

Machines 30,000 30,000

Acc. Depreciation 12,000 17,500

Wages Payable 900

Unearned Fees 6,700 6,500

Owner's Capital 24,000 24,000

Owner's Drawing 4,800 4,800

Fees Earned 25,000 25,500

Wages Expense 14,000 14,900

Depreciation Expense 5,500

Supplies Expense 800

Insurance Expense 400

Total 67,700 67,700 74,400 74,400

Adjusting Entries

SR. No Accounts Debit Credit

1) Accounts Receivable 300

Sales 300

As Sales increase so do the Accounts receivable.

2) Insurance Expense 400

Prepaid Insurance 400

Insurance expired by $400.

3) Supplies Expense 800

Supplies 800

Supplies used up by amount $800.

4) Depreciation Expense 5,500

Accumulated Depreciation 5,500

Depreciation Expense amounts to $ 5,500

5) Fees Earned 200

Unearned Fees 200

Provided Services for which payment had been collected,

6) Cash 500

Fees Earned 500

Received $500 for services provided.

7) Wages Payable 900

Cash 900

Paid wages payable to the employee.

REM Consulting

Net income

Fees Earned 25500

Wages Expense 14,900

Depreciation Expense 5,500

Supplies Expense 800

Insurance Expense 400

Net Income 3900