Course Project

Question

Go to Course Home and review the Course Project Overview. Continue to use the Course Project template from the Files section. In this graded discussion, we will be examining the operation of the Accounting Information System (AIS) with the use of problems and exercises from your textbook. The goal is to cover all of the requirements to ensure an opportunity for your successful completion of the Course Project.



Let’s start with Adjusting Entries.

On March 31, 2017, the following data were accumulated to assist the accountant in preparing the adjusting entries for Oregon Realty:

A. The supplies account balance on March 31 is $ 5,890. The supplies on hand on March 31 is $ 3,260.

B. The unearned rent account balance on March 31 is $12,800, representing the receipt of an advance payment on March 1 of four months’ rent from tenants.

C. Wages accrued but not paid at March 31 is $ 1,970.

D. Fees accrued but unbilled at March 31 is $ 13,500.

E. Depreciation of computer equipment is $ 2,800.

Required:

1. Please pick one of the above transactions and prepare the adjusting entry.

2. Briefly explain the difference between adjusting entries and entries that would be made to correct errors.


SECOND PART:
Second part is reply to 4 discussion posts on your own words with comment .

POST 1:
Donald Daniels

I picked Item E

1. That would be debit to the depreciation expense account and a credit to the accumulated Depreciation account.

Income statement Balance Sheet
Depreciation Expense Accumulated Depreciation
$2,800 $2,800



2. Adjustment entries are different from entries made to correct error, because adjustment entries reduce a balance of an account to 0 for the purposes of getting the account ready for the next reporting period. They are not caused by an error like and correction entries. In a perfect world we would never have to adjust for an error, but we will always need to adjust an account to 0 for the next reporting period.


POST 2:
Vincent Hale
4:53pm Local: Nov 27 at 4:53pm
Course: Nov 27 at 2:53pm
1.

A).

The March 31 adjusting entry debits the expense and credits the assess:

$5,890 – $3,260 = $2,630 = Asset used Expense during the period



Supplies Supplies Expense
$5,890 $2,630
Bal $3,260 Balance $2,630
2. The adjusting entries are made at the end of each period while the error entries are done on a per error basis. Not an every period action.

Answer

Part One: Adjusting Entries

Question 1

The adjusting entry for the accrued wages is as journalized in Table 1. These entries indicate that the wages expense account is debited while the wages payable account is credited. Table 2 shows the entry of wages expense in the income statement. Table 3 shows that wages payable will be recorded in the balance sheet as a liability.

ORDER A SIMILAR PAPER NOW

Table 1. Adjusting Entry for Wages Accrued

Date	Account Name	Debit	Credit
		$	$
31-Mar-17	Wages expense	1,970.00
	Wages payable		1,970.00
To record the accrued wages

Table 2. Posting of Wages Expense

	Expenses
	Wages expense
31-Mar-17	1,970.00

Table 3. Posting of Wages Payable

	Liabilities
	Wages payable
		31-Mar-17	1,970.00

Question 2

Adjusting entries constitute an important part of the accounting cycle while correcting entries are irrelevant when there are no errors to be rectified. Also, adjusting entries are made at the period end while correcting entries are posted whenever mistakes are identified. Besides, adjusting entries involve a balance sheet as well as an income statement account while correcting entries may affect a combination of accounts of financial statements (Weygandt, Kieso, Kimmel, & DeFranco, 2008).

Part Two:  Replies to Posts

Donald Daniels was right when he adjusted $2,800 depreciation by debiting it to depreciation account as an income statement item, and crediting the same amount to the accumulated depreciation account as a balance sheet item (Harrison, Horngren, & Thomas, 2013). However, Donald was wrong to note that adjusting entries always reduce an account to zero.

Vincent Hale was correct to record supplies expense of $2,630 ($5,890-$3,260) as an income statement account. It is also right that the supplies’ balance to be recorded in balance sheet is $3,260. Vincent was also right that, adjusting entries are mainly done at the accounting period end while errors are rectified whenever discovered. Ana Vargas has an idea of what to debit and credit, but journalizing is wrong. Jaime Butler was wrong. He should have debited unearned rent account and credited rent revenue account. Ana and Jaime were right on their opinion on correcting and adjusting entries.

References

Harrison, W. T., Horngren, C., & Thomas, C. W. (2013). Financial accounting. Boston, MA: Pearson Learning Solutions.

Weygandt, J. J., Kieso, D. E., Kimmel, P. D., & DeFranco, A. L. (2008). Hospitality financial accounting. New York: John Wiley and Sons.