At the end of the current year, $17,555 of fees have been earned but have not been billed to clients.

At the end of the current year, $17,555 of fees have been earned but have not been billed to clients. Journalize the adjusting entry (include an explanation) to record the accrued fees.

Answer:

Accounts Receivable 17,555

                Fees Earned 17,555

                 Accrued fees. 

At the end of the current year, $23,570 of fees have been earned but have not been billed to clients

At the end of the current year, $23,570 of fees have been earned but have not been billed to clients. Journalize the adjusting entry (include an explanation) to record the accrued fees.

Answer:

Accounts Receivable 23,570

                  Fees Earned 23,570

                   Accrued fees.

On the basis of the following data, (a) journalize the adjusting entries at June 30, the end of the current fiscal year, and (b) journalize the reversing entries on July 1

On the basis of the following data, (a) journalize the adjusting entries at June 30, the end of the current fiscal year, and (b) journalize the reversing entries on July 1, the first day of the following year:

1. Wages are $13,200 per day for a five-day workweek, ending on Friday. The last payday of the year was Thursday, June 27.

2. Accrued fees earned but not recorded at June 30, $25,000.


Answers:

a. (1) June 30 Wages Expense............................................. 13,200
Wages Payable.......................................... 13,200
Accrued salaries ($13,200 × 1 day).
(2) 30 Accounts Receivable....................................... 25,000
Fees Earned................................................ 25,000
Accrued fees earned.
b. (1) July 1 Wages Payable................................................ 13,200
Wages Expense.......................................... 13,200
Reversing entry.
(2) 1 Fees Earned................................................... 25,000
Accounts Receivable.................................... 25,000
Reversing entry.

The adjusting entry for accrued fees was omitted at the end of the current year. Indicate which items will be in error, because of the omission

The adjusting entry for accrued fees was omitted at the end of the current year. Indicate which items will be in error, because of the omission, on (a) the income statement for the current year and (b) the balance sheet at the end of the year. Also indicate whether the items in error will be overstated or understated.

Answers:

a. Fees earned (or revenues) will be understated. Net income will be understated.

b. Accounts receivable (or assets) will be understated. Owner’s equity (owner’s capital account) will be understated.